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| You can have a national solar program...but the WTO says you should not discriminate against foreign solar panels. |
With "friends" like the US and India, it seems there is no need for enemies--at least in the trade realm. A few years ago, the US complained that India was discriminating against foreign producers of solar panels by requiring that
government-subsidized purchases meet a local content requirement under a national procurement program. [See case
DS 456.] Late last year, the WTO dispute settlement mechanism ruled
against India. Recently, an appeal by India on the matter was also rejected:
A three-member dispute settlement panel of the WTO, which was set up in 2013 after the US complained that India unduly favours local solar manufacturers, had ruled against India in August and the February 24 ruling is a reiteration by the panel after India went in appeal. India's Solar Mission offers a subsidy of up to Rs 1 crore per MW to solar developers sourcing components from local manufacturers. It also stipulates that 10% of the solar capacity target of 100,000 MW by 2022 should be built with domestically manufactured solar modules, which has led to a small part of the solar auctions being reserved for developers employing only domestic content.
India had suggested a compromise by which the domestic content requirement would not be imposed on private solar developers or made part of the auctions and would be restricted to public services such as the railways and defence. But even this failed to cut much ice with the US or the WTO.
Unhappy about this state of affairs, India has
hit back at the US timing-wise with a complaint that the US was failing to meet its commitments concerning the temporary movement of natural persons to the US. That is, Indian services firms needing engineers and others to complete work Stateside have found it increasingly difficult to do so given (a) higher visa expenses and (b) fewer available visas. Indian firms being the largest users of such visas to America, recent cost increases are seen as violating
Mode IV provisions:
In a statement, the WTO said that India has initiated a dispute proceeding against the US regarding measures imposing increased fees on certain applicants for L1 and H1B categories of non-immigrant temporary working visas into the US, as well as measures relating to numerical commitments for H1B visas.
"The government of India is of the view that these and comparable measures taken by the US are not in conformity with some of the provisions of GATS such as Articles II, V:4, XVI and XX and paragraph 3 and 4 of the GATS Annex on Movement of Natural Persons Supplying Services. These measures also appear to be inconsistent with Articles III:3 and IV:1 of the GATS," the WTO said.
What particular upsets India is that they had been lobbying the US not to change this visa policy, which fell upon
deaf ears anyway:
The US government has doubled the fees for temporary work visas for skilled professionals like H1B and L1 visas to $4,000 and $4,500 respectively. India is the largest user of H1B and L1 visas -- taking 67.4 percent of the 161,369 H1B and 28.2 percent of the 71,513 L1 visas issued in FY14.
US President Barack Obama signed into law the Consolidated Appropriations Act 2016 on December 18, 2015, with the provisions applicable to companies that employ 50 or more persons in the US with more than 50 percent of them holding H1B or L1 non-immigrant status. This will remain effective till September 30, 2025.
Despite repeated requests from the Indian government, the US administration went ahead with its decision, which came into force on December 18, 2015. The US decision is expected to impact the Indian IT and ITES industry.
The complaint is viewed as "tit for tat" against the superpower, which has used the WTO as a forum to snub Indian government's plans to encourage its solar industry by offering subsidies to the manufacturers, as well as reduce its dependence on Indian imports, something encouraged as part of Prime Minister Narendra Modi's Make in India program.
If nothing else, it gives trade lawyers work :-)
