WTO rules against India’s Solar Programme: US and India were unable to reach to an agreement

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Geneva: By imposing domestic content restrictions on the production of solar cells and modules as part of its National Solar Mission, New Delhi (India) has violated ‘Global Trade rules’, as stated by the World Trade Organization- WTO dispute settlement panel. Moreover, as United States, the its solar exports to India had fallen by 90% from the year 2011, when the country (India) had imposed the domestic content requirement- DCR measures.

It was seen three years after the period in which the United States have launched a dispute against India at the World Trade Organization- WTO, where US found complaining that the DCR measures have violated core norms of the Trade- related investment provisions, national treatment provisions to treat imported products on the par with the domestically manufactured products and financial subsidy rules. Thus, these allegations were preferred by US against India and now the ruling has arrived on.

Now, the panel comprising of Three- member, chaired by former New Zealand Trade envoy- David Walker found commenting that the DCR measures of India are inconsistent with the Article 2.1 of the Trade- Related Investment Measures- TRIMS and Article III:4 of the General Agreement on Tariffs and Trade of 1994. Thus, as per decision of the said panel, the DCR measures of India are not ‘Justified’ as per the general exceptions comes under the Article XX (j) or Article XX (d) of the said GATT 1994.

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However, the final verdict is yet not pronounced by the Panel on the financial subsidies, which India providing for its solar power projects.  Further, it was seen that, on Wednesday the panel has issued its final report, after seeing that the India and US were unable to reach to an agreement on this issue.

Moreover, as per India, it was proposed that the domestic content requirement measures would be used by it for buying solar panels for its own consumption like by the railways and defence and would not sell the Power which would be generated from such subsidized panels for commercial use. However, such offer would have been rejected by US, as there was difference in perception and expectations, as said by Commerce Ministry Official.

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Adv. Faim Khalilkhan Pathan