Looming Solar Dispute

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Later this week, on April 25, 2014, the United States is expected to file a dispute with the World Trade Organization (the WTO) regarding India’s domestic content requirements for solar cells and solar modules under its Jawaharlal Nehru National Solar Mission programme, introduced to promote the development of solar power generation facilities in the country. The United States alleges that India requires solar power developers to purchase and use solar cells and solar modules of Indian origin and that India’s solar power developers receive certain benefits and advantages, such as long-term tariffs for electricity, provided that they purchase and use solar cells and solar modules of domestic origin. Indeed, purchasing domestic solar cells and modules is a condition for companies to enter into power purchase agreements with Indian power companies and enjoy benefits such as favorable rates for electricity purchases.

According to the Office of the United States Trade Representative (the USTR),

USTR is standing up for American workers and businesses who manufacture and export solar energy products as well as taking decisive action to make solar energy more affordable and accessible in India, in line with President Obama's commitment to address climate change.

Specifically, the United States claims that India provides less favourable treatment to solar cells and solar modules imported from the United States than that accorded to like products originated in India and that these are trade-related investment measures inconsistent with India's obligations under the General Agreement on Trade and Tariffs. It seeks the immediate withdrawal of the domestic content requirement.

Stay tuned for further updates.

climate change domestic content requirement electricity tariff GATT General Agreement on Trade and Tariffs India Jawaharlal Nehru National Solar Mission Office of the United States Trade Representative solar cell solar module United States USTR World Trade Organization WTO

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