Readies for fight if the US makes a second request for a panel at the WTO

India has rejected US’ request for a dispute settlement panel at the World Trade Organisation (WTO) over mandatory domestic sourcing norms in solar projects on the ground that more discussions were required.

If the US makes a second request to the Dispute Settlement Body of the WTO for a panel, as is likely, New Delhi will not be able to reject it again as per existing rules.

“We have rejected US’ first request for a panel as we do believe that the compulsory domestic sourcing of solar panels and solar cells in our solar projects do not violate WTO rules. But if we can’t convince the US through our discussions, we are ready to fight our case formally whenever a panel is established,” a Commerce Ministry official told Business Line.

The Dispute Settlement Body of the WTO, in its meeting on April 25, considered the US request for a dispute settlement panel on the solar issue, but dropped it when India rejected the request.

Washington launched a fresh complaint against India in February this year when the Government added thin films to the list of items to be locally sourced in the second phase of its National Solar Mission, although local sourcing was restricted to just half the projects.

“We have been telling the US that since sourcing of power generated under the solar mission is done by a Government-owned agency, it is Government procurement which does not fall within the purview of the multilateral agency,” the official said.

The US had lodged its first complaint against India at the WTO early last year following grant of 950 MW of solar projects by the Ministry of New & Renewable Energy with a condition that all solar modules for the projects have to be purchased locally.

(This article was published on April 29, 2014)
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