WTO rules against India in solar power dispute

Supports US in saying power purchase agreements signed by govt 'inconsistent' with international norms

India on Wednesday lost a case at the World Trade Organization (WTO) after the global trade body said power purchase agreements signed by the government with solar firms for the ambitious National Solar Mission did not meet international norms.

India might appeal against the WTO's panel ruling, a PTI report said later.

The US had filed a complaint before the WTO on this issue in 2014, alleging foreign firms would not be able to take part in India’s electrification programmes and the lucrative government contracts that came with it. It said a clause relating to domestic content requirement (DCR) for the procurement of solar cells and modules under Phase-I and Phase-II of the Jawaharlal Nehru National Solar Mission were discriminatory and “nullified” the benefits accruing to American solar power developers.

After looking into the matter, the WTO’s dispute settlement panel had also ruled that “the DCR measures are inconsistent” with relevant provisions of the Trade Related Investment Measures (TRIMs) Agreement and with the articles of the erstwhile General Agreement of Trade and Tariffs (GATT). The panel also found that the DCR measures accorded “less favourable treatment” to American companies and were “not justified” under the general exceptions in GATT rules.

Earlier on Wednesday, Commerce and Industry Minister Nirmala Sitharaman had informed the Rajya Sabha that India and the US have engaged multiple times to settle the long-running solar power trade dispute through mutually agreed solution at WTO.

The panel found that DCR measures were not distinguishable in any relevant respect from the domestic content requirements previously examined under this provision by the Appellate Body in Canada — Renewable Energy / Feed-In Tariff Programme.

“In particular, the panel found that the electricity purchased by the government is not in a ‘competitive relationship’ with the solar cells and modules subject to discrimination under the DCR measures,” the findings said.

Government officials could not be reached for a comment.

India has an ambitious target of generating 20,000 Mw of solar power by 2022.