India’s booming Solar Energy Program Hit by WTO Ruling

Published By : 29 Feb 2016 | Published By : QYRESEARCH

It seems that India’s national solar power program has hit a roadblock with the U.S. winning a ruling against India at the World Trade Organization (W.T.O). In 2013, the U.S. had challenged the rules on the origin of solar cells and modules used in India’s booming solar program. India had imposed that in its solar power program, certain cells and modules would be domestically manufactured. However, the U.S. has pointed out that this is against the WTO rules and would discriminate against imports. The U.S. has reported that after the imposition of the rule in India, the solar exports to India had decreased by 90% from 2011. Both the sides were trying to negotiate over the matter and hence, the WTO ruling was repeatedly delayed. According to an Indian official, a compromise might let India to subsidize state projects such as railway and defence projects. 

How India’s National Solar Mission would be impacted?

A couple of years back, India had virtually no solar capacity. Through National Solar Mission, the country has created one of the fastest-growing solar industries across the globe. The program aims to decrease the cost of solar energy and achieve 100,000 MW of solar power capacity by 2022. This is more than the current combined solar capacity of the top five solar-producing countries across the globe. 

The ‘buy-local’ rules are aimed to nurture and grow new industries while stressing on the goal of 100% clean energy. The international trade body’s ruling against India’s domestic solar program reflects another WTO ruling in 2013against ‘buy-local’ rules in Ontario where thousands of green jobs were created while successfully reducing emissions. After the WTO ruling, Ontario had to scrape off the ‘buy-local’ rule and end incentives for large-scale solar energy projects. In India, the ruling would significantly undermine the growth of the solar power industry.

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