New Delhi: The government has dropped its plan to impose an anti-dumping duty on solar panel imports, upsetting Indian manufacturers. It is seen as a diplomatic move ahead of Prime Minister Modi’s meeting President Obama in Washington to remove an irritant to the US.
A quasi-judicial body had ordered the imposition of duty on panels imported from the US, China, Taiwan and Malaysia to protect domestic solar manufacturers.
The order issued had set duties of between 11 and 81 US cents per watt following an investigation which started in 2011. The ruling had to be published by the Finance Ministry within a stipulated time frame to take effect.
“There was no notification. We allowed it to lapse,” said Commerce Minister Nirmala Sitharaman without elaborating. Modi’s White House talks are fixed for September 29 and 30.Â
India and the US set great store by the economic potential of their ties, but their relationship has been fraught in recent years over trade policies and patents.
The move over solar panels comes two days after the Modi administration said it was trying to speed up clearances for all pending patent applications and working on an intellectual property rights (IPR) policy – seen by analysts as another step towards smoothening things with Washington.Â
Prime Minister Narendra Modi is an advocate of solar energy and India aims to raise its solar power capacity to 20,000 MW by 2022 from 1,700 MW.
India imported solar products worth nearly 6000 crore ($984 million) last year, according to an industry estimate, whereas domestic manufacturers’ sales amounted to less than 2% of that figure.
The Obama administration aims to increase bilateral trade to $500 billion a year from about $100 billion currently.
However, New Delhi is unhappy over a threat of trade sanctions made by the US Trade Representative’s (USTR) office about India’s protection of IPR, preference for domestic producers and non-trade barriers. Â Â