United States wins WTO case against India’s local content rules for solar

“The WTO decision, finding India’s solar energy programme in violation of global trade law, is an outrage”.

But a requirement that certain cells and modules be made in India fell afoul of WTO rules on discriminating against imports.

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.

India’s domestic content requirements, it agreed, discriminate against U.S. solar cells and modules by requiring solar power developers to use Indian-manufactured cells and modules rather than United States or other imported solar technology in breach of global trade rules.

Under President Obama’s direction, the United States has mounted the most ambitious upgrade of trade enforcement in the history of modern US trade policy.

“Today, the WTO panel agreed with the United States that India’s “localization” measures discriminate against US manufacturers and are against WTO rules”.

“This is an important outcome, not just as it applies to this case, but for the message it sends to other countries considering discriminatory localisation policies”, said US Trade Representative Michael Froman. “In the last three months alone, Ecuador was ordered to pay $1bn for cancelling a petrol contract under a Bilateral Investment Treaty, and now India has been found guilty by the WTO for building solar panels and supporting local jobs”.

“The United States strongly supports the rapid deployment of solar energy around the world – including in India”.

The Indian government may now have to adjust some of the policies underpinning its Solar Mission to comply with WTO trade rules or risk sanctions. An American group of environmentalists also slammed the ruling, reported the Business Standard. She said this in a reply to four questions related with solar power trade dispute with the United States including whether India has now sought to reach and out-of-the court settlement with the USA on this issue.

But in its ruling, the WTO panel rejected India’s arguments that the policy was needed to avoid disruption in imports and to ensure compliance with the country’s requirements to promote sustainable development.

Cited among Obama administration’s “strong enforcement record” was another case “against India to end its illegal ban on USA poultry and other agricultural products”.

The WTO ruling, which can be appealed within 60 days, was repeatedly delayed as the two sides tried to negotiate a settlement.