India Proposes Compromise Over US Complaint On Domestic Content Use In Solar Programme
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India may propose a crucial compromise to the US over its complaint against mandatory use of domestically produced solar power equipment in the former’s solar power programme.
Delivering a judgement in late 2015 on the complaint filed by the United States, the World Trade Organization (WTO) ruled that domestic content requirements under India’s National Solar Mission are illegal and violated international trade rules. India had set strict conditions on developers to use India-made solar panels during the first phase of the National Solar Mission, which saw an addition of around 570 MW of utility-scale solar photovoltaic power projects to the country’s development pipeline.
India is now planning to propose a compromise to the US wherein projects developed by private sector companies shall not be mandated to use solar modules manufactured in India.
The Domestic Content Requirement (DCR) policy has been seen as one of the tools to promote and support Indian module manufacturing companies. The government had earlier ruled out anti-dumping duties on imported modules to allow a level playing field to the domestic manufacturers.
The government, however, continues to assure Indian manufacturers that ample demand for the products shall be generated under the National Solar Mission, which aims at 100 GW installed solar power capacity by March 2022. As part of the compromise, the government is expected to go ahead with DCR policy only for the projects from which the electricity is supplied to government-owned companies and entities — a substantial capacity is to be auctioned by public sector companies such as NTPC, NHPC, Coal India. Large-scale solar power projects have also been planned by the Indian Railways and the Indian armed forces. WTO rules provide for a ‘loophole’ wherein governments can use domestically-manufactured content for their own usage.
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