US blocks India’s Ambitious NSM through World Trade Organization

At the World Trade Organization (WTO) India could not defend its stand after being challenged by the United States, regarding the rules on the origin of solar cell and solar modules used in Indian solar power programme, and got defeated by the US.

Background of the National Solar Mission (NSM) scheme

With an aim to make India’s power generation green and to establish India as a global leader in solar energy by making the policy conditions for its diffusion for the whole country as quickly as possible thus meeting the ever increasing demand of power in the country, the National Solar Mission was launched in 2010.

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What National Solar Mission Aims At?

The Mission aims to open 20,000 MW of grid-connected solar power by 2022 and is aimed to reduce cost of solar power generation in the country through: long term policy; aggressive R&D, large scale deployment goals; and domestic production of crucial raw materials, components and products to obtain grid tariff Parity by 2022.

How Much Important is NSM for India?

The National Solar Mission is very important for India because: India has become one of the World’s fastest- growing countries having Solar industries from virtually having no Solar capacity. India has named its Solar Mission as a core component of its contribution to the Paris agreement to fight climate change, and many leading Solar companies have announced plans to set-up new factories in India to produce solar cells, the parts of solar plants that use Sunlight to produce electricity and these parts are the main cause behind the dispute at World Trade Organization.

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Background of the Dispute at World Trade Organization.

  • The United States had complained to the World Trade Organization in 2013 that India’s National Solar Mission had become discriminatory against India.
  • However, a clause, the Domestic Content Requirement (DCR), of NSM mandates a percentage of components to be sources locally to boost homegrown production of Solar Cells.
  • The only way to end the pressure of US India had to approach World Trade Organization.
  • But thanks to US and World Trade Organization, India fell afoul of WTO rules on discriminating against imports.
  • The United States had claimed that its export to India had fallen by 90 % from 2011, when India imposed DCR.
  • The World Trade Organization ruling was repeatedly delayed as two sides were trying to negotiate a settlement. However, against this ruling India can appeal within 60 days.

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9 COMMENTS

  1. Sir I have not understand what is the problem of us .means they are thinking that india is getting more importance from other countries in terms of investment in india

    • Hi Ashwinipatil,

      As under NSM a clause Domestic Content Requirement is entered by India which means solar cells will be developed in India by solar companies. But US wants India to import those technologies, since the export of US to India has fallen by 90%. Therfore, US raised the issue to WTO against India for its own sake…….

  2. Will it answers questions around India , pack conflicts as well…its all planned by someone who needs follower not partners ???

  3. Its a jelous tendancy of us compnes thay want to sell forcefully thir item related to NSM

  4. Our dirty politician always offer these kund of situation to US so that development could kept in pending and it could be theme for their next election campaign

  5. sir is their any commitment between US and India in exports and imports that India should import this much quantity every year.if yes tell me how much else then what is US problem?????

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