The International Trade Administration, under the United States Department of Commerce, has recommended levying a countervailing duty against wind energy equipment manufacturers from India. The recent steps are a stark reminder of Obama era fight in the World Trade Organisation between India and the United States to protect their local renewable energy industries.
With the Joe Biden-led Democrats now in office, the US clean energy lobby appears to be back in action.
According a notice by the Enforcement and Compliance, International Trade Administration agency said, “The Department of Commerce preliminarily determines that countervailable subsidies are being provided to producers and exporters of utility scale wind towers (wind towers) from India. The period of investigation is April 1, 2019, through March 31, 2020.”
In November last year, the US Department of Commerce published its initiation of the countervailing duty (CVD) investigation of utility scale wind towers from India. In February 2021, nine additional new subsidy allegations (NSAs) were filed and the Department of Commerce recommended initiating investigations on eight programs under question.
Among the Indian government programmes under investigation are the Priority Sector Lending Program, Concessional Custom Duty Exemption Certificate and the Enhancement of Competitiveness in the Capital Goods Sector: Technology Acquisition Fund Program. The Incentives to Industries Scheme under the Gujarat Industrial Policy are also subject to investigation.
According to the US International Trade Administration, “The merchandise covered by this investigation consists of certain wind towers, whether or not tapered, and sections thereof. Certain wind towers support the nacelle and rotor blades in a wind turbine with a minimum rated electrical power generation capacity in excess of 100 kilowatts and with a minimum height of 50 meters measured from the base of the tower to the bottom of the nacelle (i.e., where the top of the tower and nacelle are joined) when fully assembled.”
Vestas Wind Technology India is the only individually examined exporter/producer in this investigation. The Department of Commerce has preliminarily determined a subsidy of 3.74 per cent. It has estimated a rate of 397.16 per cent against Naiks Brass & Iron Works, Nordex India, Prommada Hindustan, Suzlon Energy, Vinayaka Energy Tek, Wish Energy Solutions and Zeeco India based on the adverse facts available.
This aggressive posturing by the US government is similar to the stand taken during the previous stint of Democrats in the United States. India had faced criticism at the World Trade Organisation (WTO) for its domestic content requirement clause in government tenders. The US had then alleged that Indian tenders were discriminating against American businesses that wanted to participate in India’s solar energy deployment programs. India had lost this case at the WTO in 2016.
Subsequently, India filed a complaint against local content requirement mandates in eight American states and won at the WTO in 2019.