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India beats U.S. at WTO in renewable energy case

PTI, New Delhi,June 27, 2019 21:17 IST, Updated:June 27, 2019 21:17 IST
WTO

The World Trade Organisation’s logo is pictured outside the trade body’s headquarters in Geneva. Photo Credit: REUTERS

In September 2016, India dragged the U.S. to WTO’s dispute settlement mechanism over America’s domestic content requirements and subsidies provided by eight states in the renewable energy sector.

A WTO dispute resolution panel has ruled in favour of India in a case against the U.S. saying that America’s domestic content requirements and subsidies provided by eight of its states in the renewable energy sector are violative of global trade norms.

The panel concluded in its ruling that “the measures” of the US “are inconsistent” with certain provisions of the General Agreement on Tariffs and Trade (GATT), the World Trade Organisation (WTO) said in a statement on June 27. It said the U.S. has “nullified or impaired benefits accruing to India under that agreement”. GATT aims to promote trade by reducing or eliminating trade barriers like customs duties.

The ruling stated that 10 measures implemented by the U.S. pertaining to renewable energy sector are inconsistent with its obligations under GATT 1994.

In September 2016, India dragged the U.S. to WTO’s dispute settlement mechanism over America’s domestic content requirements and subsidies provided by eight states in the renewable energy sector. Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota were the eight States providing subsidies.

India had stated that the measures are inconsistent with global trade norms because they provide less favourable treatment to imported products than to like domestic products, and because the subsidies are contingent on the use of domestic over imported goods.

The ruling of dispute panel can be challenged in WTO’s appellate body which is part of the dispute settlement mechanism of the Geneva-based multilateral body. The ruling comes at a time when there are trade tensions between the two countries.

The U.S. has rolled back export incentives from India under its GSP programme and New Delhi has imposed higher customs duties on 28 American products.

The two countries are also at loggerheads on a number of other disputes at the WTO. The U.S. has challenged certain export promotion schemes of India, while India has challenged U.S.’s unilateral hike on customs duties on certain steel and aluminium products.

India beats U.S. at WTO in renewable energy case
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Great news, I remember around 2014, when India was trying to do a great push in renewable energy, with tender requirements in such a way, that it required greater part of manufacturing to be done in India, USA pushed India to WTO & India lost.... I was quite pissed at that time
That was a great loss to India, as its plan was to go big & use these global tenders to kickstart the industry...
So India took USA to WTO for its own similar domestic content policy - EXCELLENT (pay back in kind)

Despite the limitations, India still made huge capacity improvement by such a large numbers in Renewable Energy, that India already got quite a decent Industry going of its own, which was the primary objective to create a market of scale industry... It would have been even bigger & better had USA not dragged India to WTO

Its a great shame the Article, doesn't list the 2016 ruling of similar case against India, as India WTO case was in response to USA WTO Case in equal kind on same sector - 2016 news refreshed below
India loses WTO appeal in US solar dispute
 
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LoneWolfSandeep said:
Despite the limitations, India still made huge capacity improvement by such a large numbers in Renewable Energy, that India already got quite a decent Industry going of its own, which was the primary objective to create a market of scale industry... It would have been even bigger & better had USA not dragged India to WTO
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Interesting. Can you provide some details about our PV manufacturing industry ? I thought we imported everything from China, Taiwan etc.
 
Gautam said:
Interesting. Can you provide some details about our PV manufacturing industry ? I thought we imported everything from China, Taiwan etc.
Click to expand...
I agree, China does control a big segment still in India... But with India getting the cheapest solar power anywhere in world, means there is incentive for localization to keep cost low by competition, else price cant remain cheapest.
Other than Adani - here a list of top 10 solar manufactures in India
Top 10 Solar Panel Manufacturers in India 2019
Also, KPMG report, for future of Indian PV sector below
https://www.google.com/url?sa=t&rct...APH9HOx8.pdf&usg=AOvVaw1aq57U8Z1AVwRZgKwPauAT

Like I said in earlier post, Had USA not started WTO proceeding against India earlier, we would have a really massive local PV industry. Though we have improved a lot from 2014 capacity & capabilities in PV sector, where tech changes almost yearly basis, it would have been better without the WTO moved by USA, now USA will be forced to get cheap PV from rest of World in future, as India retaliates in kind to USA - This is poetic justice, don't live in a glass house & throw stones at others is the moral for USA, if they are smart enough to get it in first place.
 
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LoneWolfSandeep said:
Great news, I remember around 2014, when India was trying to do a great push in renewable energy, with tender requirements in such a way, that it required greater part of manufacturing to be done in India, USA pushed India to WTO & India lost.... I was quite pissed at that time
That was a great loss to India, as its plan was to go big & use these global tenders to kickstart the industry...
So India took USA to WTO for its own similar domestic content policy - EXCELLENT (pay back in kind)

Despite the limitations, India still made huge capacity improvement by such a large numbers in Renewable Energy, that India already got quite a decent Industry going of its own, which was the primary objective to create a market of scale industry... It would have been even bigger & better had USA not dragged India to WTO

Its a great shame the Article, doesn't list the 2016 ruling of similar case against India, as India WTO case was in response to USA WTO Case in equal kind on same sector - 2016 news refreshed below
India loses WTO appeal in US solar dispute
Click to expand...

From high end cryogenic engine to a low end solar panel , intention of america with respect to India's progress cant get more clearer than this .
 
What can revive India’s GDP growth — consumption and investment

By: Sunil Jain | Updated: June 24, 2019 2:44:32 AM

Budget 2019-20: Cutting corporate taxes, or RBI cutting repo, won’t help much if the government’s policies are seen to be hitting investments.
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Budget 2019: How sweeping the reforms will be depends on whether prime minister Modi thinks India is in a crisis.

Budget 2019: Though government economists have done a comprehensive job of demolishing ex-CEA Arvind Subramanian’s argument that India has overestimated its GDP growth by as much as 2.5 percentage points, what is worrying is that while average growth for FY19 may be a little over 6.8%, that for the January to March quarter (Q4) has fallen to a mere 5.8% versus 8.1% a year ago. It is this growth level that India has to pull itself up from, and the prospects aren’t good, which is why some forecasts are looking at an FY20 growth that is lower than that in the previous year.

While growth in private consumption levels have remained at the same 7% level in both Q1 and Q4 of FY19 (they fell from 12% to 10% in terms of current prices), investment growth has collapsed from 13% to 4% (and from 17% to 7% in current prices). In such a scenario, the only way GDP growth can pick up is if investment levels or government consumption rises dramatically—it grew from 7% in Q1 to 13% in Q4 in constant prices, and from 12% to 16% in current prices—but with the government quite cash-strapped, that isn’t a possibility; in any case, since government expenditure is just 9-10% of GDP, there is just that much it can achieve. Indeed, given the NBFC crisis, and its impact on credit growth, the downside pressure on GDP growth is even higher.

Some argue that, along with a sharp cut in corporate tax rates—India’s are amongst the highest in the world—a sharper cut in repo rates by RBI will do a lot to stimulate investment; so, while finance minister Nirmala Sitharaman can do the first in the budget, RBI Governor Shaktikanta Das will do the rest in the next credit policy. Both moves will help, but how much is not clear. Even if RBI cuts repo, this may not translate into lower rates for a variety of reasons, including the fact that the government-mandated savings rates on ‘small deposits’ puts a floor to bank-deposit rates and, in turn, lending rates. And tax cuts can’t help if the investment climate is poor.

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If an investor in a power plant can’t get enough coal to run it because the public sector monopolist Coal India isn’t producing enough, or if a bankrupt state electricity board can’t either buy the power or pay for it on time, how will a lower interest rate or a tax cut help?

Though these are not strictly budget issues, traditionally budgets are used to make larger policy announcements that will be followed through during the year; so, apart from the actual numbers on deficits etc, Sitharaman’s budget will be watched for whether the government uses it to shed its anti-industry image.

In the case of telecom, as this newspaper has catalogued regularly, the investment climate turned hostile even before RJio’s entry with its very low tariffs; while the government used to charge industry a revenue-share at the time it gave out spectrum almost free, it carried on with this even after it started charging an arm and a leg for the spectrum. It was relatively easy for prime minister Narendra Modi to fix this, but Congress president Rahul Gandhi’s suit-boot-ki-sarkaar jibe seemed to have given him cold feet.

In the oil and gas sector, despite Modi’s professed aim to lower import dependence, oilcos do not get the market price for all their output. In the case of natural gas, only that produced from new fields will get the market price; but if firms don’t make higher profits on their existing production, how will they invest to find new gas? And while firms are free to get market prices in the case of oil, if the government specifies which buyers are to get how much oil, this ensures there is no real price discovery. Nothing exemplifies this anti-investor attitude better than the government’s treatment of UK firm Cairn Energy which, within a few years, produced a fourth of India’s oil output. It was slapped with a retrospective tax, its shares worth $1bn were confiscated and dividends etc worth $300-400mn were appropriated; indeed, when Cairn (by then sold to Vedanta) wanted an extension of its lease—so that it could add to India’s oil production—the government agreed only if Cairn raised the revenue it would share by a whopping 10 percentage points (bit.ly/2OZUy2r).

In the case of minerals like coal and iron ore—even without oil, they comprise 25% of India’s imports, and 55% with oil—hardly 10% of India’s geology has been explored even though doubling this can create another 5 million jobs. Apart from unconscionable delays in getting environment clearances, as in the telecom sector, rapacious government levies are a big problem; as compared to 8-12% levels globally, Indian levies on most non-oil minerals work out to around 30% of top-line revenues. The government is focused on increasing the country’s overall exports—this can’t be done if taxes and interest rates aren’t slashed and rigid labour laws abolished—but if imports of minerals fall due to higher local production, the forex impact is the same.

If investment levels have fallen dramatically due to poor government policy, so has FDI, from 1.9% of GDP in FY16 to 1.6% in FY19. If the government changes it policy on e-commerce after Walmart spent $16bn to buy Flipkart, for instance, it is difficult to see how foreign investors are going to remain enthused.

Certainly, PE funds and others will bring in money to take advantage of the bargains available at the NCLT, but greenfield investment requires a more predictable regime.

Much like in 1991, the budget will be watched for whether it unleashes a slew of reforms, the new industrial policy that President Ram Nath Kovind spoke of on Thursday. How sweeping the reforms will be depends on whether prime minister Modi thinks India is in a crisis. Given the state of the fisc, the falling investment levels and the rising joblessness, the crisis is apparent even if no one is mortgaging their gold.


What can revive India’s GDP growth — consumption and investment
 
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G-20 Osaka summit: India refuses to sign declaration on free flow of data across borders

Written by Shubhajit Roy | Osaka | Updated: June 29, 2019 10:41:29 am

Sources said this issue has become a major point of discord between major developed countries in the G-20 on one side, and India and China on the other side.
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Prime Minister Narendra Modi greets Japanese Prime Minister Shinzo Abe at the G-20 summit in Osaka, Japan, Friday, June 28, 2019. (AP Photo: Susan Walsh)

In a sign of resistance against developed countries led by the US and Japan, which are pushing for free flow of data across borders, India Friday refused to become a signatory to the Osaka declaration on digital economy that was signed by 24 countries and groupings.

While a majority of G-20 countries signed off on the launch of “Osaka track”, an overarching framework promoting cross-border data flow with enhanced protections launched by Japan Prime Minister Shinzo Abe, India was joined by South Africa and Indonesia in keeping away.


Seated between US President Donald Trump and Chinese President Xi Jinping at a meeting on digital economy, Abe underscored the importance of his “Data Free Flow with Trust” concept — a move spearheaded by Japan that calls for the creation of international rules enabling free movement of data across borders.


Explained:
India is hedging its bets
As trade wars roil global markets, the Osaka move on data signals that digital economy matters now to world leaders at the geopolitical level. Still building a framework to harness its data economy potential, India is hedging its bets on the issue. Even if it means breaking ranks with strategic partners — the US and Japan.​


The issue of data for development was flagged by India at the BRICS leaders’ meeting Friday, which Foreign Secretary Vijay Gokhale said had emerged as a “major issue” in international rule-making.

Gokhale, who briefed reporters after the BRICS meeting, said India believes that the discussions and negotiations pertaining to data should be held within the context of the World Trade Organisation (WTO). “Data is a new form of wealth,” the Foreign Secretary said, adding that the WTO is framing international rules on this issue.

Sources said this issue has become a major point of discord between major developed countries in the G-20 on one side, and India and China on the other side.

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Express Cartoon by E P Unny.

India’s position was articulated at the recent G-20 ministerial meeting in Tsukuba city in Japan on June 8 and 9, when Commerce Minister Piyush Goyal conveyed India’s concerns over playing catch-up in this technological frontier. “We believe all nations should appreciate that the digital divide within and across nations is a serious impediment for developing countries to benefit from Digital Trade. Capacity constraints in developing countries, can be overcome with timely support of training and creation of digital infrastructure. This is important for facilitating a level playing field in the digital economy for all countries to take equitable advantage of data free flow,” he had said.

The Osaka initiative, introduced in a speech at this year’s World Economic Forum and one of Abe’s pet projects at the G20, seeks to standardise rules in global movement of data flows with better protection in personal information, intellectual property and cybersecurity.

Abe said digitally driven economies can spark innovation and encourage economic growth. But in order to do so, there needs to be a reliable set of rules for the free flow of data.

Trump lent his support to Abe’s plan, saying the free flow of data is an integral part of the American digital economy’s success, along with strong privacy and intellectual property protections, and access to capital and innovation.

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Prime Minister Narendra Modi at the G-20 summit in Osaka, Japan.

“The digital economy is a crucial driver of economic growth. At the same time, as we expand digital trade, we must also ensure the resilience and security of our 5G networks,” Trump said, taking a subtle dig at Chinese telecommunications giant Huawei. “This is essential to our shared safety and prosperity.”

But Xi defended China’s policy. “Effective governance should promote collecting, analyzing and applying data, and all of the countries must individually manage data with order,” he said.

Although Abe had initially hoped to highlight the digital push at the G20 summit, it was later downgraded to a secondary event. The decision was made to avoid ostracizing countries still on the fence, a senior Japanese government official was quoted as saying by Japan Times.

G-20 Osaka summit: India refuses to sign declaration on free flow of data across borders
 
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