United States expresses concern over Indian restrictions on import of solar technology

The U.S. Commerce Secretary Gary Locke has expressed deep concern in an interview with The Wall Street Journal over the Indian government's restrictive rules regarding import of solar power technology.

Government regulations allow entry of foreign players in the solar panel manufacturing market in India only if they set up local facilities in joint ventures with domestic manufacturers. This however does not interest U.S. companies, for whom the Indian market would otherwise present a huge opportunity.

In a bid to meet the mammoth energy requirements of a rapidly growing economy, India plans to generate 20000 Megawatts of solar power by 2022 under its National Solar Mission and has marked a $20-billion budget in subsidies for developers of solar power plants. However, in order to qualify for the subsidies, the developers can only use solar panels made and assembled in India. This would typically favor domestic manufacturers of crystalline silicon solar modules, including Moser Baer and Tata BP Solar, a joint venture of Tata Power Co Ltd and BP.

Speaking to the WSJ in New Delhi, Mr. Locke said, We think that's the wrong way to go. We think there are different ways in which you might try to achieve the objective of supporting more manufacturing within India. He suggested that the government should look at tax incentives and subsidies that would encourage foreign players to build manufacturing facilities in India without banning their exports.

A recent report in Reuters however pointed out that U.S. manufacturer First Solar Inc. could still be well poised to benefit from India's massive push to solar power generation because its panels are made of cadmium telluride and are hence not subject to the domestic content requirement.