. /.  WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/87 
22 September 2011 
 (11-4567) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
INDIA:  MANDATORY LOCAL CONTENT REQUIR EMENTS IN PROJECT 
GUIDELINES FOR PHASE I (BATCH 1 AND BATCH 2)  
OF THE JAWAHARLAL NEHRU NATIONAL  
SOLAR MISSION 
 
Questions from the United States 
 
  The following communication, dated 21 September 2011, is being circulated at the request of 
the Delegation of the United States. 
 
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Background 
 
 In 2009, India launched a major new initiative – the Jawaharlal Nehru National Solar Mission  
– intended to boost diffusion of renewable energy ge neration within India, and to "establish India as a 
global leader in solar energy."  The Mission's overall objective is to create 20,000MW of solar 
generation capacity, achievement of  which will take place in three phases.  During Phase 1, running 
from 2010-2013, the Mission will commission projects creating 1,000MW of generation capacity. 
 
 In July 2010, India's Ministry of New and Renewable Energy issued guidelines for the selection of projects under Phase 1.  The guidelines provi de that project developers "are expected to 
procure their project components from domestic ma nufacturers, as far as possible."  However, for 
2010-2011 (Batch 1 of Phase I) projects based on cr ystalline silicon technology (the predominate 
technology for production of solar modules), the guidelines require that all projects use modules 
manufactured in India.  For projects implemented after FY 2011-2012 (Batch 2 of Phase I), project 
developers must use both modules and cells manufactur ed in India.  Finally, for projects based on 
solar thermal technology, the guidelines require 30% local content in all plants and installations. 
  The United States has raised this issue with I ndia bilaterally on several occasions.  We have 
posed questions to India on the issue in the contex t of India's recent (September 2011) Trade Policy 
Review (TPR), as well as in the Subsidies a nd Countervailing Measures (SCM) Committee.  Japan 
has also raised this issue in the SCM Committee and during India's TPR.   
 
Questions 
  In July 2010, India's Ministry of New and Renewable Energy (MNRE) issued guidelines for the selection of projects under Phase 1 of the Ja waharlal Nehru National Solar Mission.  The 
guidelines provide that project developers "are e xpected to procure their project components from 
domestic manufacturers, as far as possible."  For photovoltaic projects based on crystalline silicon technology, the guidelines require that all project de velopers use modules manufactured in India; for 
such projects selected in FY2011-12, developers mu st use both modules and cells manufactured in G/TRIMS/W/87 
Page 2  
 
  India.  For projects 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% domes tic content in thermal projects appear to 
constitute measures that require the purchase or use of products of domestic origin or from 
a domestic source.  How does India believe each of these measures individually comports with the obligations in Article 2 of the TR IMs Agreement and the illustrative list thereto? 
 
2. The "domestic content requirements" require  that 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. 
  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 Gene ration Based Incentive," or feed-in tariff, will 
be payable for approved Mission projects. 
 
3. In light of the fact that all Mission projects must mandatorily achieve previously specified 
local content and local purchasing requireme nts, the incentives provided for by MNRE 
appear to condition the receipt of an advantage on a requirement to purchase or use 
products of domestic origin or from a domes tic source.  How does India believe these 
measures, taken together, comport with th e obligations in Article 2 of the TRIMS 
Agreement and the illustrative list thereto?   
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