Solar Panel Dispute at WTO

Jan, 09, 2018

India rejects U.S. solar claim at WTO, explores new defence


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, National solar programme, Safeguard tariffs

Mains level: India’s plan of renewable energy usage and hindrances in achieving the targets


Solar panel dispute at WTO

  1. India hit back at Washington’s latest legal assault on its solar power policies at the World Trade Organisation (WTO)
  2. India rejected a U.S. legal claim and started exploring possible new protection of India’s own solar industry

What is India planning to do?

  1. India told the WTO last week that it was considering the case for imposing temporary emergency tariffs on solar cells, modules and panels, after a petition from the domestic industry
  2. Safeguard tariffs are permitted by the WTO if there is evidence of serious harm or threat of serious harm, to a country’s production from a sudden, unforeseen surge in imports


  1. Last month the United States triggered a new round of litigation at the WTO
  2. It argued that India had failed to abide by a ruling that it had illegally discriminated against foreign suppliers of solar cells and modules

India’s reply

  1. India said it had changed its rules to conform with the ruling and that a U.S. claim for punitive trade sanctions was groundless
  2. It said Washington had skipped legal steps, failed to follow the correct WTO procedure, and omitted to mention any specific level of trade sanctions that it proposed to level on India, leaving India “severely prejudiced”
  3. India would be vindicated if the proper process was followed

Why this dispute?

  1. India unveiled its national solar programme in 2011, seeking to ease chronic energy shortages in Asia’s third-largest economy without creating pollution
  2. The United States complained to the WTO in 2013 that U.S. solar exports to India had fallen by 90 percent
  3. The WTO judges agreed that India had broken the trade rules by requiring solar power developers to use Indian-made cells and modules

Renewable energy disputes rising

  1. Renewable energy has become an area of severe trade friction
  2. This is because major economies are competing to dominate a sector that is expected to thrive as reliance on coal and oil dwindles
Apr, 14, 2016

Ministries bicker over strategy in U.S. solar case

  1. Context: India lost a case in WTO pertaining to local content requirements in the Jawaharlal Nehru National Solar Mission for solar cells/modules
  2. News: There are inter-ministerial differnces over strategy to be adopted by India to drag US to WTO’s Dispute Settlement Body
  3. The renewable energy policies of several State govt’s in US violates the global trade body’s norms
  4. How? Many State govts in US had “very significant” domestic content requirements “violating” the US obligations under the WTO agreements
Mar, 26, 2016

India to appeal WTO verdict in solar case filed by the U.S.


  1. News: India will appeal against the World Trade Organisation’s (WTO) verdict over its policy relating to solar power equipment
  2. Context: India had, as part of its National Solar Mission, imposed a stipulation that solar cells and solar modules be locally sourced
  3. Relevance: U.S. had filed a case against India at the WTO demanding a level-playing field for Indian and foreign solar component manufacturers
  4. WTO ruled in favour of the U.S.
  5. From India’s side: India’s capacity to produce solar components and solar cells comprises only a portion of the demand in India
  6. Indian manufacturers had a complaint against the U.S. counterparts for dumping in India
  7. In the U.S., nine states had similar programmes to protect their domestic manufacturers
Feb, 25, 2016

India may appeal against WTO’s panel ruling in solar case

  1. India’s appeal: Against the WTO’s panel ruling that the country’s power purchase agreements with solar firms were “inconsistent” with international norms
  2. Context: Rulings of the WTO’s dispute settlement panel can be challenged in the WTO’s appellate body
  3. Why? The U.S. had filed a complaint before the global trade body alleging discrimination against American firms
  4. Background: U.S. had dragged India to WTO on this issue in 2014
  5. Why U.S. alleging? because clause relating to domestic content requirement in the country’s solar power mission were discriminatory in nature and “nullified” the benefits accruing to U.S solar power developers
Aug, 28, 2015

WTO Ruling against India

  1. WTO ruled against India’s imposition of local content requirements in its solar power programme.
  2. India will appeal against this ruling in the dispute which was raised by the US.
  3. WTO members are not supposed to insist on national content requirements and provide “national” treatment under which imports must be treated at par with domestic products.
  4. India maintains the ruling shall not affect its solar power programme or ‘Make in India’ initiative.
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