China Supports India’s Challenge To WTO Solar Ruling

India has found support from an unlikely corner in its fight against the recent ruling by the World Trade Organisation that termed the domestic content requirement policy under the National Solar Mission as ‘inconsistent’ with international norms.

Xie Zhenhua, Special Representative for Climate Change of China, while speaking at the 22nd BASIC Ministerial Meeting on Climate Change said that most countries provide subsidies to renewable energy projects and that China supports India’s position.

In February this year, the World Trade Organization (WTO) ruled that a part of India’s National Solar Mission did not conform to international trade laws. The US had challenged India’s program to offer higher capital support to solar power project developers that use modules manufactured or assembled in India. The Indian Government also sets aside a minimum percentage of capacity that must be built using domestically assembled modules.

The Indian minister for new and renewable energy recently announced plans to file counter complaints against the US. The complaints are expected to target mandatory use of domestic content being followed in some US states.

An Indian delegation had approached the US representatives to resolve the matter before the WTO delivered its February verdict. The Indian Government is believed to have proposed that domestically assembled modules shall be used in power projects set up only by government-owned companies, while any mandatory use of Indian modules shall not be applicable on any project that sells electricity to commercial entities.

Such a compromise would allow entities like the Indian Railways and the defence forces to rely on Indian modules. The Indian Railways has set a target to add 1 GW solar power capacity while the defence forces have so far committed to build 300 MW capacity.

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