WTO Panel in US-India Dispute on Local Value Add Law on Solar Modules and Cells

The US and India are currently facing off on solar trade at the WTO, with Washington formally challenging NSM’s local content requirements for solar modules and cells in February - its second complaint on the subject.

The US has said that, while it supports India’s efforts to increase its renewable energy capacity, this must be done in a way that does not give local products an advantage over their foreign equivalents. Otherwise, Washington officials warn, these measures could hamper the deployment of clean energy at the international level.

Indian officials, in turn, have said repeatedly that their scheme is indeed in line with WTO rules, while noting their own concerns over US-based programmes.

In 2011, the US exported US$119 million worth of solar industry products to India, making the Asian country the US’ second largest export market in this area. However, these numbers have fallen in recent years, which Washington has blamed partly on the local content requirements of New Delhi’s national scheme.

In 2010, for instance, India established the Jawaharlal Nehru National Solar Mission (NSM) with the goal of deploying 20,000 megawatts of solar panels, which would in turn be connected to the grid, by 2022. Recent data places India’s current solar capacity at 2600 megawatts - a 56 percent increase from last year - with about half due to state policies.

Modi’s Bharatiya Janata Party, which won a landslide victory the country’s general elections last weekend, ran on a pro-development platform that focused - among other areas - on how to improve India’s clean energy generation capacity, particularly with regards to solar. The BJP has said it would build upon the Gujarat system, while adapting its approach to the need of different regions in India.