The World Trade Organization (WTO) continues with its earlier ruling and has rejected India’s appeal against Domestic Content Requirements (DCR) for manufacturing solar cells and modules. WTO believes India’s localization rules discriminate against U.S. manufacturers. The result came with no surprise to anyone in the industry.
A statement from U.S. trade representative said that U.S. solar exports have fallen by more than 90 percent since India implemented DCR rules. However, the reason for this fall has more to do with competition from cheaper Chinese panels than DCR rules.
The World Trade Organization had ruled against India’s domestic content policy for solar cells and modules in February of this year; India appealed the ruling in a bid to keep DCR rules in place for government procurement, claiming exemptions from WTO trade rules on the basis that its NSM and solar sector was included in government procurement, and that its domestic solar goods were in short supply.
These arguments were rejected. The WTO rules are clear: countries are not allowed to favor local producers of components while discriminating against imports. In seeking to boost India’s domestic manufacturing industry, the government’s NSM outlined certain local content requirements across the country, and thus was in violation of these regulations.
The case against India was originally filed in 2013, following the announcement of DCR in Jawaharlal Nehru National Solar Mission (JNNSM) Phase II policy.
The US filed a case against India to WTO on country’s solar mission plan. The US alleged that India’s solar mission appears to discriminate against the US solar equipment by promoting solar energy producers to use locally manufactured cells.