INDIA – CERTAIN MEASURES RELATING TO SOLAR CELLS AND SOLAR MODULES RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA REQUEST FOR THE ESTABLISHMENT OF A PANEL
Document: Appellate Body Report
Date: 29 January 2018
Document codes: WT/DS456/20
Complainant: U.S.
Respondent: India
Third parties: Brazil, Canada, China, EU, Japan, South Korea, Malaysia, Norway, Russia, Turkey, Ecuador, Saudi Arabia, Taiwan
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. III:4  GATT 1994Art. 2.1  Trade-Related Investment Measures (TRIMs)

INDIA – CERTAIN MEASURES RELATING TO SOLAR CELLS AND SOLAR MODULES
RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA
REQUEST FOR THE ESTABLISHMENT OF A PANEL
The following communication, dated 23 January 2018, from the delegation of India to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

India hereby requests the establishment of a panel pursuant to Article 21.5 of the Understanding
on Rules and Procedures Governing the Settlement of Disputes ("DSU"), with respect to the issues
identified below.

1. BACKGROUND TO THIS REQUEST

On 14 October 2016 the Dispute Settlement Body ("DSB") adopted the recommendations and
rulings of the Appellate Body Report in India – Certain Measur es Relating to Solar Cells and
Modules (WT/DS456).1

The Appellate Body Report ( dated 16 September 2016) addressed India 's appeal
on certain issues of law and legal interpretations developed in the Panel Report (
dated 24 February 2016). The Panel was established on 23 May 2014 to consider a complaint by
the United States against certain domestic content requirements ( "DCR measures") imposed by
India on solar power developers ( "SPDs") selling electricity to governmental agencies und er its
Jawaharlal Nehru National Solar Mission ( "NSM"). The DCR measures at issue, under Phase I
(Batch 1), Phase I (Batch 2), and Phase II (Batch 1 -A) of India's National Solar Mission, required
that certain types of solar cells and modules that are used by the SPDs, are made in India.

The Appellate Body upheld the finding of the Panel that the DCR measures were inconsiste nt with
Article 2.1 of the TRIMs Agreement and Article III:4 of the GATT 1994, and were not covered by
the derogation under Article III :8(a) of the GATT 1994, based on the reasoning that the
procurement of solar cells and modules was not by the government, but by SPDs engaged in the
generation of power. The Appellate Body concluded, in paragraph 6.2 of its Report, that under
Article III:8(a) of GATT 1994, the product purchased by way of procurement (i.e., solar power),
must necessarily be "like", or "directly competitive" with or "substitutable" for – in other words, in
a "competitive relationship" with – the foreign product subject to dis crimination (i.e., solar cells
and modules). The Appellate Body also noted the findings of the Panel that the DCR measures are
"laws, regulations or requirements governing the procurement" of electricity 2 and that the
procurement of electricity is "by governmental agencies".3

After the adoption of the Appellate Body Report by the DSB on 14 October 2016, India issued a
communication to the DSB dated 08 November 2016, and subsequently at the meeting of the DSB

1 Action by the Dispute Settlement Body, WT/DS456/13 circulated on 14 October 2016.
2 Appellate Body Report, India-Solar Cells, para 5.42and fn. 152, referring to Panel Report, India-Solar
Cells, para 7.145.
3 Appellate Body Report, India-Solar Cells, para 5.42 and fn. 153, referring to Panel Report, India-Solar
Cells, para 7.151.

held on 23 November 2016, India announced its i ntention to implement the DSB 's
recommendations and rulings in this dispute and stated that it would need a reasonable period of
time in which to do so.

On 16 June 2017, India and the United States informed the DSB that they had agreed that the
reasonable period of time to implement the DSB's recommendations and rulings would be
14 months. Accordingly, the reasonable period of time ( "RPT") w as set to expire on
14 December 2017.4

On 14 December 2017, pursuant to Article 21.6 of the DSU , the delegation of India circulated a
status report to the Chairperson of the DSB, in which it stated that India has ceased to impose any
measures found inconsistent in the DSB 's recommendations and rulings, and has complied with
the said recommendations and rulings.5

On 20 December 2017, the United States made a request pursuant to Article 22.2 of the DSU
seeking authorization from the DSB to suspend tariff concessions under the covered agreements. 6
India objected to this request vide its communication dated 03 January 2018 to the Chairperson of
the DSB, under Article 22.6 of the DSU .7 In its objection, India highlighted that the United States'
request was not a valid request under Article 22.2 of th e DSU in the absence of initiation of the
negotiations on compensation, and its failure to specify either any specific element of non -
compliance or the proposed level of suspension of concessions.

In the event of any disagreement between the parties with respect to "the consistency with a
covered agreement of measures taken to comply with the recommendations and rulings" ,8 the
logical course of action is first to have recourse to Article 21.5 of the DSU. Since India considers
that it has brought itself in to full compliance with its WTO obligations and the United States
appears to disagree in its communication of 19 December, 2017 , the issue of compliance must be
decided following the procedures of Article 21.5 of the DSU. In the circumstances of this dispu te,
therefore, India seek s recourse to Article 21.5 of the DSU to resolve the disagreement over
compliance.

2. IMPLEMENTATION ACTION BY INDIA

There is no law or regulation in India mandating DCRs for solar cells and modules. The Panel while
analyzing the DCR measures at issue, noted that the NSM is being implemented in several
successive "Phases" with each phase being further sub-divided into several "Batches."9 The
United States had based its panel request on Phase I (Batch 1), Phase I (Batch 2), and Phase II
(Batch 1-A) of India's NSM.
As noted by the Panel, the Ministry of New and Renewable Energy of India ( "MNRE") is the Indian
central government ministry responsible for "all matters relating to renewable en ergy."10 The
Panel noted that with regard to the three Batches under its consideration, MNRE had issued the
Guidelines documents setting forth the terms and conditions governing each of the three Batches.
Under the first two Batches, i.e. Phase I (Batch 1) and Phase I (Batch 2), MNRE selected NTPC
Vidyut Vyapar Nigam Limited ( "NVVN") to act as the agency responsible for implementing the
solar power project selection process, including but not limited to issuing the Request for Selection
document governing selection of solar power projects. NVVN served as the government party in
the individually executed PPAs. For Phase II (Batch 1), MNRE selected the Solar Energy
Corporation of India ("SECI") to perform the same functions that NVVN performed in respect of
Phase I.11

4 Communication from India and the United States concerning Article 21.3(b) of the DSU, WT/DS456/16
dated 16 June 2017.
5 Status Report by India, WT/DS456/17 dated 14 December 2017.
6 Recourse to Article 22.2 of the DSU by the United States, WT/DS456/18 circulated on 20 December
2017.
7 Recourse to Article 22.6 of the DSU by India, WT/DS456/19 circulated on 08 January 2018.
8 Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes.
9 Panel Report, India-Solar Cells, para 7.3.
10 Panel Report, India-Solar Cells, para 7.4.
11 Panel Report, India-Solar Cells, para 7.4.

The Panel noted that the scope of the DCR measures varied across batches .12 The Panel also
recorded in its Report that the Guidelines would have no legal impact if no action were taken after
the Batch was initiated, i.e. if there were no subsequent bidding/selection processes.13
In this connection, India submits the following:
As recorded in paragraph 7.14 of the Panel Report (DS/456/R, dated 24 February 2016):
(a) In Batches 1 and 2 of Phase I of the NSM, PPAs for 140 MW were entered into under
the DCR m easures, and PPAs of 330 MW were entered into with imported cells and
modules.
(b) In Batch 1A of Phase II of the NSM, PPAs for 375 MW were entered into under the DCR
measures.
Of the above, in Batch 1A of Phase II, only PPAs for 355 MW were eventually commissioned under
the DCR measures, and there were additional 325 MW which involved imported solar cells and
modules.

At the time of the Panel and Appellate Body hearings, there were several other projects, in respect
of which Guidelines and Request for Selecti on documents had been issued using the DCR
measures, and which were at various stages of tendering and selection. The details of these
projects are given below:
a) On 10.03.2015, MNRE had issued the "Guidelines for Selection of 3000 MW Grid -
Connected Solar P V Power Projects under Batch -II for State Specific Bundling Scheme ."
The implementing agency for these Guidelines was NTPC Ltd. (a Government owned
company which is also the parent company of NVVN), 14 and accordingly NTPC Ltd. issued
the Request for Selection documents dated 21.05.2015,15 03.07.2015,16 09.10.201517 and
16.06.201618.
b) On 04.08.2015 MNRE had issued the "Guidelines for Implementation of Scheme for Setting
up of 2000 MW Grid -connected Solar PV Power Projects under Batch -III – State Specific
VGF Scheme" pursuant to which SECI issued the Request for Selection documents dated
15.02.201619 and 24.02.201620.
c) On 14.03.2016, MNRE had issued the "Guidelines for Implementation of Scheme for
Setting up of over 5000 MW Grid -connected Solar PV Power Projects under Batch -IV",
pursuant to which SECI issued Request for Selection document dated 22.04.2016.21
Pursuant to the adoption of the DSB recommendations and rulings, India held stakeholder
consultations and took steps to ensure swift compliance with the same. With regard to the
Guidelines and Request for Selection documents identified above, which had been at various
stages of tendering and selection at the time of the adoption of the DSB recommendation s and
rulings, the following PPAs were entered into:

12 Panel Report, India-Solar Cells, para 7.7.
13 Panel Report, India-Solar Cells, para 7.11.
14 The Panel had noted in para 7.5 that NTPC is a state-owned entity of which NVVN is a wholly-owned
subsidiary.
15 Request For Selection Document For Grid Connected So lar Photo Voltaic Projects Under Batch -II
Tranche-I Of National Solar Mission Phase - II (State Specific Bundling Scheme) For Gani -Sakunala Solar Park
Phase-II in Andhra Pradesh, NTPC Limited (21 May 2015).
16 Request For Selection Document For Grid Connecte d Solar Photo Voltaic Projects Under Batch -II
Tranche-I Of National Solar Mission Phase - II (State Specific Bundling Scheme) (Non Solar Park – DCR
Category) in Rajasthan, NTPC Limited (03 July 2015).
17 Request For Selection Document For Grid Connected Sola r Photo Voltaic Projects Under Batch -II
Tranche-I Of National Solar Mission Phase - II (State Specific Bundling Scheme) (Non Solar Park – DCR
Category) in Telangana, NTPC Limited (09 October 2015).
18 Request For Selection Document For Grid Connected Solar P hoto Voltaic Projects Under Batch -II
Tranche-I Of National Solar Mission Phase - II (State Specific Bundling Scheme) For Pavagada Solar Park
(Under DCR Category) in Karnataka, NTPC Limited (16 June 2016).
19 Request For Selection Document For 1000 MW Grid Connected Solar Photo Voltaic Projects Under
JNNSM Phase-II Batch-III Tranche-V in Karnataka, Solar Energy Corporation of India Ltd. (15 February 2016).
20 Request For Selection Document For 50 MW Grid Connected Solar Photo Voltaic Projects Under JNNSM
Phase-II Batch-III Tranche-I in Maharashtra, Solar Energy Corporation of India Ltd. (24 February 2016).
21 Request For Selection Document For 250 MW Grid Connected Solar Photo Voltaic Projects Under
JNNSM Phase-II Batch-IV Tranche-I in Gujarat Solar Park at Charanka , Solar Energy Corporation of India Ltd.
(22 April 2016).

(a) 150MW in the State of Andhra Pradesh (Kurnool Solar Park), in March 2016.
(b) 100 MW in the State of Rajasthan, in June 2016.
(c) 50 MW in the State of Maharashtra, in July 2016.
(d) 50MW in the State of Telangana, in July 2016.
(e) 50 MW in the State of Karnataka, in August 2016.
(f) 25 MW in the State of Gujarat, in December 2016.
(g) 100MW in the State of Karnataka, in December 2016.

India confirms that after December 2016, there have been no PPAs pursuant to Guidelines and
Request for Selection documents requiring DCR measures determined to be inconsistent under the
DSB recommendations and rulings.

Apart from the aforementioned projects, some projects which were initially envisaged under
DCR measures, were cancelled by the MNRE on the basis of assessments that these may not be
completed within the RPT. These include projects cumulating to capacity of 300 MW that were to
be undertaken by SECI, and 250 MW that was to be undertaken by NTPC Limited.

Thus, India would like to state and affirm that in order to comply with the recommendations and
rulings of DSB in this dispute, it has: (a) taken all appropriate steps to bring its measures into
compliance with the DSB recommendations and rulings; (b) no PPAs under the DCR measures
have been entered into after December 2016; (c) some projects that were initially contemplated
with the DCR measures, have been cancelled; and ( d) India no longer enters into any PPAs
involving the DCR measures. This removes the basis for any inconsistency of India 's measures,
with Article III:4 of the GATT 1994 and Article 2.1 of TRIMs. Therefore, as of the date of expiry of
the RPT on 14 December 2017, India is fully compliant with its WTO obligations.

As specified in India's communication under Article 21.6 of the DSU, India is fully compliant with
the recommendations and rulings of the DSB.22

3. REQUEST FOR THE ESTABLISHMENT OF PANEL UNDER ARTICLE 21.5 OF THE DSU

India requests that a Panel be established pursuant to Article 21.5 of the DSU, with the standard
terms of reference as set forth in Article 7.1 of the DSU , to resolve the disagreement between
India and the United States as regards India 's compliance with the recommendations and rulings
of the DSB. India also requests that the DSB refer the matter to the original Panel, if possible.

As India has complied with the DSB recommendations and rulings in this dispute , prompt findings
by the DSB will assist the parties in securing a positive solution to the dispute.