The World Trade Organization ruled that India violated global trade policies by imposing domestic content restrictions on the origin of solar modules and cells as part of its National Solar Mission. Officials from US Trade Representative called such ruling a significant victory as it would promote clean-energy jobs in the nation and spread solar energy across the world more rapidly.
On Wednesday, the WTO panel ruled in favor of claims from the US that India breached an international trade regulation when it created a rule which restricts what products can be used in its solar industry. Live Mint reported that a three-member panel, chaired by David Walker, a former New Zealand trade envoy, said India's domestic content requirement policies were "inconsistent" with Article 2.1 of the TRIMS or Trade-Related Investment Measures. The panel also ruled that India did not abide in Article III:4 of the GATT or General Agreement on Tariffs and Trade 1994. A 140-page report was then publicized by the panel.
Reuters reported that US sent a complaint to the WTO back in 2013 regarding India's solar program, which sought to alleviate chronic energy shortages in Asia's third-largest economy without creating pollution. A requirement that certain solar cells and modules be made in India was unacceptable to the policies of WTO on discriminating against imports. The US then reported that its solar exports to India had fallen by 90 percent from 2011 when India imposed the policies.
According to Yahoo News, the WTO panel had been expected to rule on the case within six months, however, its decision has repeatedly been pushed back as both US and India continued to negotiate.Within the past few years, India's solar program grew rapidly as the government looks to ease reliance on imported coal, fossil fuels, and has previously defended its rules.
WTO's ruling rejected India's arguments that the rules were needed to prevent disruption in imports and to ensure compliance with the country's requirements to promote sustainable development. Both parties were given 60 days to appeal the WTO ruling if they wish to do so.
