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US launches new trade action against India

Reuters | Last Updated: Tuesday, February 11, 2014 - 09:42

Washington: The United States on Monday launched a fresh challenge to India`s national solar program, saying its domestic content requirements discriminate against US manufacturers.

US Trade Representative Michael Froman told reporters that the Obama administration has filed a case at the World Trade Organization over the rules. It is the second time Washington has sought a consultation at the WTO over India`s Jawaharlal Nehru National Solar Mission.

The USTR issued its first challenge a year ago when it formally requested consultations over the program, a case which Japan and Australia have since joined.

US officials had hoped a second phase of the solar program would address Washington`s concerns, but now say the harm to American producers would likely be even greater because the rules were expanded to cover so-called thin film technology that comprises the majority of U.S. solar product exports to India.

"These domestic content requirements discriminate against U.S. exports by requiring solar power developers to use Indian-manufactured equipment instead of US equipment," Froman said.

India hit back at the initial U.S. accusations in April, asking Washington to justify its own incentives offered to U.S. companies that use local labour and products in renewable energy and water projects.

The ongoing trade spat between the two allies follows the recent arrest and strip search of a female Indian diplomat in New York in connection with visa fraud charges.

The arrest sparked fury in India, prompted retaliatory measures against U.S. diplomats there and plunged U.S.-India relations to their lowest point since India tested a nuclear device in 1998.

India is widely perceived by lawmakers and business groups in Washington as a serial trade offender, with U.S. companies unhappy about imports of everything from shrimp to steel pipes they say threaten U.S. jobs.

There are 14 past or current World Trade Organization cases between India and the U.S., whose bilateral trade measures about $63.7 billion a year.

First Published: Tuesday, February 11, 2014 - 09:01
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