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Domestic sourcing for solar mission no violation of WTO rules- India tells US

According to reports, India has told the US that it does not intend to alter the domestic content requirement in its ambitious national  solar power generation programme as it is essentially procurement by the government, which is outside the purview of the World Trade Organisation.

“India is not a signatory to the Government Procurement Agreement under the WTO and hence is not under any obligation to follow rules prescribed by it,” a government official told ET.

US commerce secretary  John Bryson had in a recent meeting with commerce and industry minister Anand Sharma in Delhi raised concerns about the 30% local sourcing requirement in projects under the  Jawaharlal Nehru National Solar Mission, saying it might be in violation of WTO norms. “We have categorically told the US that we do not view the domestic sourcing clause as violative of WTO rules,” the official said, adding, “We have no plan of amending the clause.”

He said the US was now trying to influence the policy for the second phase of the solar mission.
The second phase, due for launch next year, will aim to consolidate the achievements of the first phase. As per the solar mission,  indigenous manufacturing capacity for solar power equipment is vital if the goal of 20,000 MW of solar power is to be met by 2022 in three phases.

A criteria for ensuring domestic content for first phase projects was thus introduced, making it mandatory for projects based on crystalline silicon technology to use the modules manufactured in India. Additionally, 30% domestic content is mandatory for all new solar thermal power projects sanctioned under the first phase.

Stressing that there is no flouting of WTO rules, the  commerce department has clarified that domestic content requirement is applicable to grid solar power projects where procurement of solar power will essentially be done by the government through  NTPC Vidyut Vyapar Nigam, the designated entity.
The commerce department further explained that grid solar power projects are supported under the Jawaharlal Nehru National Solar Mission only through tariff and not through capital subsidy. Capital subsidy is available for off-grid projects and there is no domestic content requirement on modules in such projects.

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