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.
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.
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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