India’s solar power programme has come under intense scrutiny by global political and business leaders, especially given its aggressive intent and extensive trade opportunities. The programme, a part of the National Solar Mission, envisages an addition of 100,000 megawatts of solar power capacity by 2022. This initiative is also seen as a critical sub-component of the global effort to limit the extent of climate change. The recent ruling by the World Trade Organisation (WTO) against India must be read against this background. The WTO has ruled that the domestic content requirement (DCR) imposed by New Delhi on the production of solar cells and modules under the National Solar Mission violates global trade rules. According to the dispute settlement panel of the WTO, “These are inconsistent with both Article III:4 of the GATT [General Agreement on Tariffs and Trade] 1994 and Article 2.1 of the TRIMS [Trade-Related Investment Measures].’’ It has gone on to say that the DCR measures “do accord less favourable treatment’’ within the meaning of the provision under Article III:4 of the GATT 1994. The WTO ruling comes three years after the U.S. raised a dispute against India, and following the inability of the two countries to agree on the changes suggested by New Delhi to its solar programme. India is convinced that the DCR is a mechanism to facilitate sustainable development. It has even indicated that it is willing to apply the DCR only for buying solar panels used for government sector consumption, and has assured the U.S. that power generated from such subsidised panels will not be sold for commercial use. Coming as it does in the midst of a presidential election year, the WTO order in this instance is a significant victory for the U.S. Hailing the ruling, President Barack Obama said: “The U.S. can’t have other countries engaged in practices that disadvantage American workers and American businesses.’’ Given the potential for positive social and economic outcomes from the ambitious solar power programme, India will be compelled, as some other countries have done, to contest the WTO ruling before the appellate body.
The WTO ruling also comes soon after the Paris climate change agreement, and is bound to open up a wider debate across nations over whether initiatives such as the solar mission, with its social relevance and significant implications for a green economy, must be viewed only from the prism of a pure business opportunity. Given India’s size and also the need to provide meaningful job opportunities for millions of people, it is imprudent to conceive of a framework that either disadvantages or discourages domestic endeavour. The fight against climate change is not an exclusive cause; it has to move in tandem with the provision of jobs and the creation of an environment that facilitates a green economy. The onus for this lies not just on the developing countries. It is time the big economies realised their responsibility in building a greener world.