New Delhi: The US expressed concern over certain Indian policies that it says inhibit investments by foreign firms, keen on collaboration with local companies, in renewable energy and clean technologies.
Such measures, aimed at protecting specialized domestic industries, would be harmful in the long term, said Francisco Sanchez, US undersecretary for international trade in the department of commerce.
“There is clearly a lot of opportunity for collaboration. We encourage India to address concerns that many have about its business environment,” Sanchez told a business meeting organized by the Confederation of Indian Industry in New Delhi on Monday. “In particular, there is increasing concern about some recent action that seems to tilt the playing field here in India away from US businesses and other foreign firms.”
Sanchez is in India on a three-day visit with a delegation of US firms specializing in clean technologies. Specifically naming India’s national solar mission, which requires local power producers to source photovoltaic cells and modules from Indian manufacturers, Sanchez said, “My concern is that many of the policies designed to protect Indian industries will only hurt them in the end.”
“For example, in clean technology, local content requirement explicitly discriminates against the imports,” he said. “Local content requirements deny Indian entities from accessing quality solar products from outside the country.
India has an ambitious target of generating 20,000 megawatts of solar power by 2022. The US is especially keen on taking a slice of this market against the backdrop of US President Barack Obama’s aim of doubling US exports by 2015. Collaboration in renewable energy was one of the themes discussed between India and the US during Obama’s visit to India last November.
Sanchez said he understood that India was trying to protect its fledgling solar power equipment manufacturers. “That is a good approach, but the path India appears to be following will force India to miss out on innovative products. This in turn could end up hindering growth and result in missed opportunities,” Sanchez said.
This isn’t the first time US trade officials have raised the issue. Last month, at a meeting of the Committee on Trade-Related Investment Measures (TRIMs) at the World Trade Organization (WTO), the US expressed concern about what it said were mandatory local content requirements of India’s solar mission. “It said the guidelines require that all projects use modules manufactured in India. The EU (European Union) shared the concern. India maintained that the guidelines in question did not violate the TRIMs agreement,” the WTO website said.
Sanchez is expected to meet Indian commerce secretary Rahul Khullar in New Delhi before heading to Hyderabad for more meetings with representatives of Indian industry. The US business delegation includes representatives of Azure Power, Serious Energy, A123 Systems Inc., Amonix Inc., Picarro Inc. and Sopogy Inc., PTI reported.
A senior official in the ministry of new and renewable energy, however, said India has allowed all technology options for solar power producers. “It is only those companies that are supplying to the government on whom there is this demand, and they are very few in number. So I don’t think the objections are quite valid,” he said.
Ronen Sen, a former Indian ambassador to the US, noted that the US had raised issues relating to a particular sector while India-US relations spanned an entire spectrum of subjects. “There is an ongoing dialogue between India and the US on relations, so it can be sorted out.”
The India Semiconductor Association (ISA) said it supports the government’s policies. “We feel that this would be a shot in the arm for local products,” said P.V.G. Menon, president, ISA.