Solar Panel Dispute at WTO

India rejects U.S. solar claim at WTO, explores new defence

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, National solar programme, Safeguard tariffs

Mains level: India’s plan of renewable energy usage and hindrances in achieving the targets


Solar panel dispute at WTO

  1. India hit back at Washington’s latest legal assault on its solar power policies at the World Trade Organisation (WTO)
  2. India rejected a U.S. legal claim and started exploring possible new protection of India’s own solar industry

What is India planning to do?

  1. India told the WTO last week that it was considering the case for imposing temporary emergency tariffs on solar cells, modules and panels, after a petition from the domestic industry
  2. Safeguard tariffs are permitted by the WTO if there is evidence of serious harm or threat of serious harm, to a country’s production from a sudden, unforeseen surge in imports

Background

  1. Last month the United States triggered a new round of litigation at the WTO
  2. It argued that India had failed to abide by a ruling that it had illegally discriminated against foreign suppliers of solar cells and modules

India’s reply

  1. India said it had changed its rules to conform with the ruling and that a U.S. claim for punitive trade sanctions was groundless
  2. It said Washington had skipped legal steps, failed to follow the correct WTO procedure, and omitted to mention any specific level of trade sanctions that it proposed to level on India, leaving India “severely prejudiced”
  3. India would be vindicated if the proper process was followed

Why this dispute?

  1. India unveiled its national solar programme in 2011, seeking to ease chronic energy shortages in Asia’s third-largest economy without creating pollution
  2. The United States complained to the WTO in 2013 that U.S. solar exports to India had fallen by 90 percent
  3. The WTO judges agreed that India had broken the trade rules by requiring solar power developers to use Indian-made cells and modules

Renewable energy disputes rising

  1. Renewable energy has become an area of severe trade friction
  2. This is because major economies are competing to dominate a sector that is expected to thrive as reliance on coal and oil dwindles
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