WTO - India's Solar Dispute
ON 6 February 2013, the United States requested consultations with India concerning certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission ("NSM”) for solar cells and solar modules.
The claims brought by the United States concern domestic content requirements (DCR measures) imposed by India in the initial phases of India's ongoing National Solar Mission. These requirements, which are imposed on solar power developers selling electricity to the government, concern solar cells and/or modules used to generate solar power.
The Dispute Settlement Body (DSB) of WTO established a Panel to study the issue. The Panel found that India failed to demonstrate that the challenged measures are justified. India appealed to the Appellate Body. The Appellate Body confirmed the findings of the Panel. And last week, the DSB adopted the Appellate Body Report.
The United States, which had initiated the dispute in 2013, said at the special meeting of the DSB that it was pleased with all of the findings of the panel and Appellate Body. The US said that while it supported India's efforts to promote solar energy in line with the global fight against climate change, it was of the view that India's domestic content requirements undermined these efforts by requiring the use of more expensive domestic technology.
India said it was disappointed with what it viewed as an unduly strict interpretation of the exception in WTO rules relating to government procurement. India said this limited the policy space available for undertaking government procurement and did not afford sufficient consideration to the unique nature of solar cells and modules in solar power generation. India said it was also disappointed with the findings relating to the exception in WTO rules in cases of supply shortages. India said the AB ruling effectively confined the use of this exception to restraints on exports and not those applied to imports.