India files case against US in WTO

New Delhi: India has dragged the US to the WTO against the policies of eight American states for the renewable energy sector, alleging that the domestic content requirement norms are “inconsistent” with global trade rules. “On September 9, India has requested consultations with the US under the dispute settlement system of the WTO regarding alleged domestic content requirements and subsidies provided by these states in the renewable energy sector,” the WTO said in a statement.

Under the norms of domestic content requirements, it is mandatory upon domestic companies to source a portion of input from local markets products. India has alleged that the measures of those American states are “inconsistent with WTO’s Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures,” the statement said.

They are inconsistent because they provide less favourable treatment to imported products than to like domestic products, and because the subsidies are contingent on the use of domestic over imported goods, it added. When contacted, an Indian official said: “Yes, we have sought consultations with the US in the WTO on the matter”. The eight states are Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota.

The request for consultation is the first step under the Dispute Settlement System of the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel. In the past, India and the US were involved in litigation at the WTO over the renewable energy sector.

The dispute panel of the world trade body had ruled against India in a case filed by the US. The panel had held that India’s power purchase agreements with solar firms were “inconsistent” with international norms. India has appealed against this ruling and the WTO’s appellate body is expected to give its order by mid-September. Earlier, Commerce and Industry Minister Nirmala Sitharaman had said that the government is going to file 16 cases against the US for violating WTO treaties.