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India’s energy shortage problems were made clear to the world following the blackouts last year that plagued the country, affecting more than 50% of the population. With an average of 300 sunny days a year, India is looking to aggressively expand its solar industry as a means to meet its rapidly increasing energy demands.
The national solar program, the Jawaharlal Nehru National Solar Mission, aims to install 20,000 megawatts of new solar power by 2022, but a trade war with the US may hinder these efforts.
Part of India’s solar scheme is that it requires the solar energy installers to use locally manufactured solar cells, and offers special subsidies to encourage this. This practice violates the World Trade Organisation (WTO) principles that require countries to treat all foreign and domestic goods equally, and the US has been quick to point this out, making a complaint to the WTO in February that could severely hamper the progress of solar installations.
However, given the history, India may be forgiven for trying to protect their domestic companies. In November 2012 the Indian government began anti-dumping investigations into Chinese, Malaysian, and US firms that had been importing cheap solar cells that were undercutting the prices of local manufacturers. US and Chinese imports enter the country tax-free, whereas the Indian solar manufacturers must pay duties on the raw materials that they import to make the same products.
H.R Gupta, the chairman of Indosolar, explained that “local manufacturers are not getting any business, and the solar industry is doing very poorly because of lack of orders.” Although it’s not just the Indian solar companies that worry for the future of the solar industry; twelve international green organistaions, including the Sierra Club, Greenpeace USA, Action Aid USA, and Friends of the Earth, have all asked the US to withdraw its complain and allow India to develop its solar industry.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com