. /.  WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/91 
4 October 2011 
 (11-4793) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
INDIA:  MANDATORY LOCAL CONTENT REQUIREMENTS IN PROJECT GUIDELINES 
FOR PHASE I (BATCH 1 AND BATCH 2)  
OF THE JAWAHARLAL NEHRU NATIONAL  
SOLAR MISSION 
 
Replies to Questions from the United States1 
 
  The following communication, dated 3 October 2011, is being circulated at the request of the Delegation of India. 
 
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Questions 1 & 2 
  In July 2010, India's Ministry of New and Renewable Energy (MNRE) issued guidelines for the selection of projects under Phase I of the Jawaharlal Nehru National Solar Mission.  The 
guidelines provide that project developers "are ex pected to procure their project components 
from domestic manufacturers, as far as possible."  For photovoltaic projects based on crystalline silicon technology, the guidelines req uire that all project developers use modules 
manufactured in India; for such projects sele cted in FY2011-12, developers must use both 
modules and cells manufactured in India.  For pr ojects based on solar thermal technology, the 
guidelines require 30% local content in all plants and installations.  
1. The general guidance to procure project components from domestic manufacturers; 
the mandatory requirement to use locally  manufactured PV modules and cells; and 
the mandatory requirement to achieve 30% domestic content in thermal projects 
appear to constitute measures that require the purchase or use of products of domestic origin or from a domestic sou rce.  How does India believe each of these 
measures individually comports with the obligations in Article 2 of the TRIMs 
Agreement and the illustrative list thereto? 
 
2. The "domestic content requirements" require th at investors use certain domestically-
manufactured solar equipment in order to be  eligible to develop solar projects under 
the JNNSM.  In this light, please explain how these domestic content requirements are 
not "mandatory" measures that must be complied with to obtain an advantage, and 
that require the purchase of domestic products, as set out in the Illustrative List of the 
TRIMS Agreement. 
 
                                                      
1 G/TRIMS/W/87.  G/TRIMS/W/91 
Page 2  
 
  Replies 1 & 2 
 
 The Jawaharlal Nehru National Solar Missi on (JNNSM) is a major initiative of the 
Government of India and State Governments to promote ecologically sustainable growth while addressing India's energy security challenge. It will al so constitute a major contribution by India to the 
global effort to meet the challenges of climate change.  
  Sustainable development is an important goa l of the WTO. Solar energy is environment 
friendly as it has zero emissions while generating el ectricity or heat. The aim of the JNNSM is to 
focus on setting up an enabling environment for solar technology penetration in the country both at a 
centralized and de-centralized level.   
  GATT Article III: 8(a) permits exemption from national treatment principle in respect of 
procurement by governmental agencies of produc ts for specified purposes and, therefore, the 
programme is not inconsistent with the provisions of Article 2 of TRIMS.  In India's view the 
domestic content requirement is not with a view to obtain an advantage and is, therefore, not covered 
by the illustrative list of TRIMS.    
Question 3 
  In its discussion of the Jawaharlal Nehru National Solar Mission, MNRE recommends 
that custom and excise duty concessions and/or exemptions be made available for equipment, 
materials, and components imported for approved Mission projects (http://mnre.gov.in/pdf/mission-document-JNNSM.pdf).  It further provides that a "normative Generation Based Incentive," or feed-in tariff,  will be payable for approved Mission projects. 
 
3. In light of the fact that all Mission pr ojects must mandatorily achieve previously 
specified local content and local purchasin g requirements, the incentives provided for 
by MNRE appear to condition the receipt of an advantage on a requirement to purchase or use products of domestic orig in or from a domestic source.  How does 
India believe these measures, taken together, comport with the obligations in Article 2 of the TRIMS Agreement and the illustrative list thereto?  
 
Reply 
  The Mission Document (http://mnre.gov.in/pdf/mission-document-JNNSM.pdf) recommends for fiscal incentives (customs and excise duti es exemptions / concessions) on specific capital 
equipment, critical materials, components and proj ect imports. The Mission Document also envisages 
a normative Generation Based Incentive payable to  the utility that would be calculated as the 
difference between the solar tariff determined by the Central Electricity Regulatory Commission and 
the base price, as indicated therein. However, the document does not suggest any linkage of the 
aforesaid incentives with the local content requirement, if any.   
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