. /.  WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/98 
10 May 2012 
 (12-2508) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
INDIA  MANDATORY LOCAL CONTENT RE QUIREMENTS IN PROJECT  
GUIDELINES FOR PHASE I (BATCH 1 AND BATCH 2) OF THE  
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION 
 
Replies to Follow-Up Questions from the UNITED STATES
1  
 
  The following communication, dated 4 May 2012, is being circulated at the request of the 
Delegation of India. 
 
_______________ 
 
 
Question 1 
 
 Follow-up to replies to questions 1 and 2 in G/TRIMS/W/91:  India cites GATT 
Article III:8(a) to explain why it believes th e JNNSM guidelines are not inconsistent with 
Article 2 of the TIMS Agreement.  Please explain how the JNNSM domestic content 
requirements constitute government procurement within the meaning of the exemption in GATT Article III:8(a), including:  what is the governmental agency whose procurement is 
subject to the local content requirements under th e JNNSM?  What products are subject to the 
procurement under the JNNSM rules?  What are the governmental purposes for which these products are procured?  Are the products s ubject to government procurement under India's 
understanding of the JNNSM ultimately re-sold and if so are they re-sold on a commercial 
basis?  What incentives are provided to proj ect developers for participation in JNNSM? 
 
Reply 
 
 The Solar power generated by the project devel opers is procured by the government through a 
designated entity -the NTPC Vidyut Vyapar Nigam Ltd. (NVVN).  The procurement of power is by a government agency and under directions/guidelines pr epared by the concerned Ministry.  This power 
is procured for governmental purposes to promote ecologically sustainable growth and not with a 
view to commercial resale.  
 
 NVVN procures the solar power from private de velopers under the bid price.  The solar 
power procured by NVVN is bundled with power allo cated to it by the Ministry of Power from the 
unallocated quota of its thermal power plants, and then supplied  to distribution companies.   As explained in India's response in G/ TRIMS/W/91, customs and excise duty related 
exemptions/concessions are recommended under JNNS M for project participants.  These are also 
available for all solar power project developers. 
 
                                                      
1 G/TRIMS/W/95.   G/TRIMS/W/98 
Page 2  
 
  Question 2 
  Follow-up to reply to question 3 in G/TRIMS/W/91:  What "fiscal incentives" (e.g., customs and excise duties exemptions/concessions)  are available to JNNSM projects?  Do the 
CERC-determined solar tariffs apply to all J NNSM projects?  Does the CERC also set solar 
tariffs for solar projects that are not under the JNNSM?    
Reply 
  Concessional custom duty and exemption on excise duty are available on all items of 
machinery required for the initial setting up of a sola r power generation project or facility.  These are 
also available for all solar power project developers.   The tariff determined by the CERC provides the benchmark against which project specific 
tariff is determined throug h the JNNSM bidding process.  
  CERC is a regulatory authority constituted under law which is responsible for regulating 
electricity tariffs in India (from all sources including solar).  Since 'electricity' is a subject on which states in India also have jurisdiction, tariffs for sp ecific state projects are regulated by the concerned 
State Electricity Regulatory Commission -which is also constituted under law. 
 
__________