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WTO Panel Rules Against India’s Solar Program |
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NEW DELHI—A World Trade Organization panel has ruled that India’s federal solar program violates global trade rules by imposing local-purchase requirements for solar cells and modules, two senior officials said Tuesday.
The Indian government will appeal against the ruling in a case raised by the U.S., the two officials said.
In a report sent to India and the U.S. late last week, the dispute settlement panel of WTO stated that New Delhi violated trade rules by imposing the local purchases under its federal solar program, one of the officials, who didn’t want to be identified, said.
The panel also ruled against India’s incentive policies for domestic solar companies to manufacture solar cells and modules in the country, the official added.
“We feel our policies are in sync with global trade practices so we will appeal against the ruling at WTO’s appellate body,” the second official, who also declined to be named, said.
According to WTO rules, its dispute settlement body will review the report of the panel at its next meeting, and then send a final report to India, which is expected in November, one of the officials said. After that, India will have two months to make its case to the appellate body of the organization, which should hear it within four months. India will have to change its rules if the appellate body rules against it, the official added.
Currently, India imports three quarters of its energy needs. Under the federal solar program known as Jawaharlal Nehru National Solar Mission, India aims to raise its solar power generation capacity to 100 gigawatts by 2022 from about 4 gigawatts now.
After coming to power in May last year, Prime Minister Narendra Modi’s government raised the target under its solar program to 100 gigawatts from 20 gigawatts, as the country aims to reduce its dependence on fossil fuels.
If the local content requirement was removed from India’s federal solar program, it would open up an opportunity for foreign companies to step in.
Last year, in a case heard before a WTO panel, the U.S. said India was unfairly restricting access to American suppliers as it moves ahead with its local purchasing rules for the solar program. India says its rules are limited to only a small portion of the program and are WTO-compliant.
This is the second case that India has lost to the U.S. at the WTO this year. In June, the appellate body of WTO upheld an earlier ruling of the dispute settlement panel against India’s ban on imports of poultry products and eggs from the U.S.
Source : wsj.com
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