The Jawaharlal Nehru National Solar Mission, which would have made India a global leader in solar energy, has suffered a major blow.
The case against India
was brought by the US. The World Trade Organization (WTO) has ruled against India’s “buy-local” provisions for large solar projects, which are entitled to subsidy and assured government procurement if the equipment is manufactured locally.
The United States complained to the WTO in 2013 about the Indian solar programme, citing them “inconsistent” with international trade norms.
The US had stated in February 2013 (and again in February 2014) that India’s domestic content requirements (DCR) accord less favorable treatment to imported solar cells and modules.
Experts say the WTO ruling will hopefully remove any obstacles to a constructive US presence in India’s solar market.
However, the current WTO ruling will make India’s solar plan more expensive, and impact domestic manufacturing and, thus job creation in the sector.
Certainly, the WTO must not come in the way of emerging economies’ initiatives to raise and achieve climate ambitions.