The Chairman of the Panel in ‘India — Certain Measures Relating to Solar Cells and Solar Modules’ has informed the Dispute Settlement Body (‘DSB’) that the final Panel Report is expected to come out next month.
The United States has challenged certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission (“NSM”) for solar cells and solar modules. Brazil; Canada; China; European Union; Japan; Korea, Republic of; Malaysia; Norway; Russian Federation; Turkey; Ecuador; Saudi Arabia, Kingdom of; Chinese Taipei are third parties to the dispute.
The NSM was launched in 2010 with an ambitious target of deploying 20,000 MW of grid connected solar power by 2022. It aimed at reducing the cost of solar power generation in the country through aggresive Research & Development and domestic production of certain critical components. Therefore, the idea was to encourage domestic production of solar panels and modules.
According to the United States, under NSM, the solar power developers are granted certain benefits such as guaranteed long term tariffs for electricity (in the form of power purchase agreements under NSM or with NTPC Vidyut Vyapar Nigam Limited) if they purchased and used solar cells and solar modules of domestic origin.
The United States’ position is that these domestic content requirements are inconsistent with Article III:4 of the GATT 1994 (National Treatment); Article 2.1 of the TRIMs Agreement( National Treatment and Quantitative Restrictions) and Articles 3.1(b), 3.2, 5(c), 6.3(a) and (c), and 25 of the SCM Agreement (Prohibition on Subsidies, Causing of Adverse Effects through Subsidies, Notification of Subsidies).Read More »