India: Domestic content compromise proposed, WTO ruling postponed

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The Indian Government has reportedly sent a proposal to the U.S., which would see its domestic content program modified. According to Bridge to India, it has proposed removing DCR requirements for private sector projects. In doing this, the government states it is complying with WTO guidelines.

In February of 2013, the U.S. requested World Trade Organization (WTO) dispute settlement consultations with the Indian Government regarding India’s DCR under its national solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM), launched in 2010. The WTO ruled last August that the requirements violate global trade rules.

The government appealed the decision, thus giving itself up to two years to continue operating under the requirements. A final ruling was then expected last Friday, January 29. A WTO trade official confirmed to pv magazine today that the decision has been postponed, however. Next Friday could see a decision announced, although a firm date has not been set. The official had not heard about the proposal and could not offer up any further details.

Bridge to India noted that DCR currently accounts for under 5% of total solar PV module demand in India and that the requirement has "failed to provide long-lasting support to the domestic manufacturing sector."

It calculates that for projects under development and allocation, the DCR requirement applies to 1.315 GW, or less than 10% of the total capacity allocations announced by central government entities. DCR is also required for some rooftop projects under the capital subsidy scheme.

Overall, it says that either a settlement or withdrawal of the case will not "substantially affect any US manufacturer, or any manufacturer from any other country for that matter." It further notes that the Government recognizes that for the solar sector to grow enough to meets its goals, module imports are a necessity.

It concludes, "If the Indian government wants to promote domestic manufacturing, the focus should be to provide policy certainty, grow the market and improve competitiveness of the sector. Progressive industrial policies at the state level, level playing field on taxation and other larger reforms required for a manufacturing sector growth in the country will have a much larger impact than having protectionist policies such as the DCR."