The United States plans to take India to the World Trade Organization (WTO) over subsidies New Delhi gives to its solar power industry, an Indian government source said on Monday, a step that could further strain relations between the countries.
At the time of going to press, US Trade Representative Michael Froman, was due to make a trade enforcement announcement linked to India in Washington on Monday afternoon at 2:00 pm Eastern Standard Time. The Indian official said Washington had informed New Delhi of the trade action it planned to take.
The United States filed a challenge with the WTO last February over elements of India’s national solar programme, which it said discriminates against foreign solar products in violation of a core global trade rule.
It was not immediately clear how Monday’s scheduled announcement relates to that action.
India’s solar programme, launched in 2010, appears to discriminate against US solar equipment by requiring solar energy producers to use Indian-manufactured solar cells and modules and by offering subsidies to those developers for using domestic equipment instead of imports, the US trade office said last February.
Last April, India hit back at the US accusations, suggesting Washington was also guilty of the banned practices. It asked Washington to justify incentives offered to US companies to use local labour and products in renewable energy and water projects, in filings to the WTO.
India is widely perceived by lawmakers and business groups in Washington as a serial trade offender, with US companies unhappy about imports of everything from shrimp to steel pipes they say threaten US jobs.
Both countries have taken disputes to the WTO on several occasions.
On Friday, the US Chamber of Commerce, a leading industry lobby called on Washington to ratchet up pressure on India over intellectual property rights, a move that could help prevent Indian companies from producing cheap generic versions of medicines still under patent protection.
Also this week, the US International Trade Commission has a hearing scheduled for Wednesday and Thursday to look into Indian trade and investment practices.
In a submission to the US Trade Representative, the Chamber of Commerce asked that India be classified as a Priority Foreign Country, a tag given to the worst offenders when it comes to protecting intellectual property and one that could trigger trade sanctions.
India is on the US government’s Priority Watch List for countries whose practices on protecting intellectual property Washington believes should be monitored closely.
Other trade groups, including those representing the pharmaceutical and manufacturing industries, echoed the call for a tougher stance on India.
* Last February, the US filed a challenge with the WTO over elements of India’s national solar programme, which it alleged discriminated against US suppliers
* The US has alleged that the solar programme offers subsidies to developers using domestic equipment instead of imports
* India too has hit back on US incentives to local labour and products in renewable energy and water projects in its reply at the WTO