By David Lawder, Reuters

Negotiations between the United States and India to resolve a solar power trade dispute are continuing with no clear end in sight, the top U.S. trade official said on Tuesday, signaling another likely delay in a World Trade Organization public ruling in the case.

The World Trade Organization (WTO) had set a Wednesday deadline to announce its decision, after several delays in recent weeks to allow the two countries time to pursue settlement talks.

Washington filed the WTO challenge three years ago, claiming that India's national solar power program illegally discriminated against imported solar panels and related products though its subsidies for domestically made products.

"We're still engaged in conversations with them," U.S. Trade Representative Michael Froman told Reuters in an interview in California. "It's too early to tell whether we're going to have an agreement or not."

Indian media have reported that a WTO dispute settlement panel had confidentially notified Washington and New Delhi that it would rule against India in the case.

Froman declined to discuss the WTO's intentions nor any details of the settlement talks. But he said that it was a U.S. decision to seek the announcement delays.

"It's at our discretion whether the WTO extends or not, based on how the conversations are going," Froman added.

Indian government officials in New Delhi, speaking on condition of anonymity due to the sensitivity of the talks, said that the settlement discussions were continuing, and there was little concern over the WTO announcement deadlines.

The U.S. trade complaint in 2013 alleged that the Jawaharlal Nehru National Solar Mission subsidies were available only if developers used equipment produced in India, violating a key global trade rule. The program is aimed at easing chronic energy shortages in India, Asia's third-largest economy.

The Obama administration argued that the subsidies were a barrier to solar products made in America and elsewhere but also effectively raised the cost of generating solar power in India and were extending the country's dependence on fossil fuels.

An Indian government official told Reuters that New Delhi may be able to agree to a compromise that would allow subsidies for Indian manufacturers only for those projects built by state sectors such as defense or railways.

Currently, private firms in India are also eligible for subsidies of up to 10 million rupees ($145,770) for each megawatt of new solar generating capacity if they opt for locally made panels and modules.

But another senior government official said, however, that India wanted to balance the WTO rules against the sensitivities of its local manufacturers.

"We can’t just depend on imports for setting up of planned 100,000 megawatts of solar power generation. Local companies will have to get a share as we want to strengthen domestic manufacturing under Prime Minister Modi’s Make in India program," the official said.

Additional reporting by Krishna N. Das and Manoj Kumar in New Delhi.

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