"The US already had a consultation with us on solar domestic content and now they have come in for a second-phase challenge. It is not a surprise...We will participate in the consultations. Our current policy is WTO compliant. We will defend it," Commerce Secretary Rajeev Kher told reporters here today.
The US yesterday challenged the domestic content requirement of India's solar mission, which requires solar power developers to use Indian-made equipment. It alleged that the requirement was discriminatory and against international norms, including World Trade Organization (WTO) laws, and affects US solar panel manufacturers.
Kher, however, pointed out that several US companies have won contracts in phase II of India's National Solar Mission.
"If you look at the phase-II contracts, you will see that most of the contracts have gone to the American companies. They have participated in those bids and many of them have succeeded," he added.
US Trade Representative Michael Froman said the US had sought WTO dispute consultations with India over the domestic content requirements in phase II of India's solar programme.
"These domestic content requirements discriminate against US exports by requiring solar power developers to use Indian-manufactured equipment instead of US equipment. These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses," Froman alleged.
In October, India approved measures for implementation of phase II of its National Solar Mission. For solar projects under phase II, he alleged that India is again imposing domestic content requirements, under which developers must use Indian-manufactured solar cells and modules.
A request for consultations is the first step in the WTO dispute settlement process and is intended to help parties find a solution. If the matter is not resolved through consultations within 60 days of the request, the US may ask the WTO to establish a dispute settlement panel.
Last February, the US had challenged India's solar programme and formally requested consultations over the first stage of the mission. The programme aims to double India's renewable energy capacity by 2017.
Both countries are contesting several cases at the WTO. Their bilateral trade stood at USD 61.35 billion in 2012-13.