Import substitution: India needs to create domestic manufacturing capacities

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inhuman rights coverIn a move reminiscent of Winin Pereira’s ‘Inhuman Rights’, a report by Kate Sheppard in the Huffington Post, focusses on a statement by U.S. Trade Representative Michael Froman asserting that India’s rules for locally made products for its solar power program “discriminate against U.S. exports” and break WTO rules.

“We are determined to stand up for U.S. workers and businesses,” he said.

The U.S. and India had until April 11 to resolve the conflict before it went to the WTO, which can impose sanctions. Last month, India indicated it would block WTO investigations into its trade policies, according to Reuters.

The dispute centres on the second phase of India’s solar power policy, known as the Jawaharlal Nehru National Solar Mission. PV Magazine described the rules in an article in October, noting that they require that half the solar components come from domestic sources.

us trade rep lheader
U.S. Trade Representative Ron Kirk objected to domestic sourcing requirements for the first phase of India’s program, leading to WTO consultations in February 2013. Phase II, however, expands domestic sourcing requirements to include thin film solar technologies, which the U.S. exports to India.

India’s Commerce Minister Anand Sharma has defended the country’s policies. “We are also clear that India has to create domestic manufacturing capacities,” he said last month, according to The Hindu; India must have those capacities. Otherwise, we will end up importing for the rest of our lives.”

 

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