US, India to go back to WTO in solar power dispute: source

India has failed to comply with a World Trade Organization ruling on solar power, the US will tell the WTO’s dispute settlement body (DSB) next month, triggering a fresh round of litigation, according to an agenda issued on Wednesday.

Renewable energy has become a hot area of trade friction as major economies compete to dominate a sector that is expected to thrive as reliance on coal and oil dwindles.

India unveiled its national solar program in 2011, seeking to ease chronic energy shortages in Asia’s third-largest economy without creating pollution.

But the US complained to the WTO in 2013, saying the program was discriminatory and US solar exports to India had fallen by 90 percent from 2011.

The US won the case last year, when WTO appeals judges ruled India had broken the trade rules by requiring solar power developers use Indian-made cells and modules.

Such “local content” requirements are banned as they discriminate in favor of domestic firms and against foreign rivals.

Under an agreement with the US, India had until December 14 to comply with the ruling and it told the DSB last week that it had done so.

If India is found not to have complied, Washington could ask the WTO for permission to impose trade sanctions on India. But the WTO dispute system is struggling to process a large number of complex disputes. The process is likely to continue for a year or more.