WTO Appellate rules against India in solar case

The Dollar Business Bureau

India suffered a setback on Friday when the appellate body of World Trade Organisation (WTO) has upheld a panel’s rulings which said that India’s power purchase pacts with solar companies were ‘inconsistent’ with global norms.

“The Appellate Body upheld each of the conclusions of the panel appealed by New Delhi,” the WTO said.

In 2014, the United States (US) had filed a complaint against India before the world trade body claiming discrimination against the US companies.

“The appellate body of WTO had issued a ruling in favour of the US administration’s claim against New Delhi’s ‘domestic content requirements (DCR)’ as per its National Solar Mission (NSM),” said Michael Froman, US Trade Representative (USTR).

Since New Delhi had enacted the given requirements in the year 2011, under which solar power developers are required to use domestically-manufactured modules and cells, solar exports from the US to India have declined by over 90 percent, he added.

“This ruling is a clear win for the solar manufacturers and workers of the US, and this is a next step forward in fighting against the climate change,” Froman said.

He further said the Obama administration in the US strongly supports speedily deploying solar energy globally, including in India.

“Local content requirements are not only contrary to WTO rules, but actually undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment, making it more difficult for clean energy sources to be cost-competitive,” he alleged.

The case has a lot of significance as New Delhi recently filed a complaint before the WTO against the DCR and subsidies given by eight states of the US in the renewable energy sector.