The World Trade Organization is expected to make its ruling on the solar trade dispute between the US and India, one of the world’s largest and most promising solar photovoltaic markets. The dispute settlement panel of multilateral trade body will have its final meeting next week.
 
In February last year, the US filed a complaint in the WTO alleging discrimination by India's national solar mission against American products including solar modules. After both the sides failed to reach an agreement to resolve the matter bilaterally, the US approached the WTO for formation of the dispute panel under the WTO's dispute settlement mechanism.
 
The US had alleged that India's program appears to discriminate against US solar equipment by requiring solar energy producers to use locally manufactured cells and by offering subsidies to those developers who use domestic equipment. It is also alleged that forced localization requirements restrict US exports to India markets.
 
In 2011, the US exported US$119 million worth of solar industry products to India, making the Asian country the US' second largest export market in this area. Since then, the level of exports has fallen, Washington says, with the national solar mission being partly to blame.
 
On January 11, 2010, India launched its national solar policy -- the Jawaharlal Nehru National Solar Mission. India has an ambitious target of generating 20GW of solar power by 2022, making it one of the most attractive markets in the world, especially given the relative decline of Europe.
 
US companies, which have large manufacturing facilities, want to export solar power equipment to India which they consider as market with huge potential. The US solar industry wants India to remove the clause of local content requirement.
 
However, analysts note that while the NSM has a local content requirement, much of the capacity increase seen in India over recent years has come as a result of state schemes, such as the one in Gujarat, which do not have local content requirements. This has mostly been utility-scale solar.