Lok Sabha Question No. 350 (UNSTARRED), answered on 2016-11-17
Subject: WTO Ruling against DCR Norms
Ministry: NEW AND RENEWABLE ENERGY
Asked by: C. N. JAYADEVAN, PRABHAS KUMAR SINGH, PRALHAD VENKATESH JOSHI, SHASHI THAROOR

## 350.

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA

## UNSTARRED  QUESTION NO. 350

TO BE ANSWERED ON 17.11.2016

## WTO RULING AGAINST DCR NORMS

## SHRI C.N. JAYADEVAN: SHRI PARVESH SAHIB SINGH: SHRI PRALHAD JOSHI:

DR. SHASHI THAROOR:

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

(a)  whether  the  World  Trade  Organization  (WTO)  has  given  ruling  against  India's  Domestic  Content Requirement (DCR) norms making it mandatory to source India made solar cells/ modules for a certain portion of solar capacity and if so, the details thereof and the reaction of the Government thereto;

(b) whether the Government is likely to withdraw support to domestic manufacturers after the WTO ruling which would be against the spirit of Make in India campaign of the Government, if so, the details thereof;

(c)  the  extent  to  which  the  Domestic  Content  Requirements  have  helped  the  solar  energy  sector  in  the country;

(d) the details of solar mission projects implemented so far, State-wise including Delhi and the details of projects in progress under the Jawaharlal Nehru National Solar Mission (JNNSM) in the country during the last two years;

(e) whether the Government is aware of the challenges faced by domestic manufacturers of solar energy equipment on account of pricing as a result of cheap imports from China and America, if so, the details thereof; and

(f) the steps taken/being taken by the Government to encourage the domestic manufacturing capacity for solar cells?

## ANSWER

## THE MINISTER OF STATE FOR POWER, COAL, NEW AND RENEWABLE ENERGY &  MINES (INDEPENDENT CHARGE) (SHRI PIYUSH GOYAL)

(a): The  World  Trade  Organization  (WTO)  panel  has  ruled  that  the  Domestic  Content  Requirement (DCR) measures under Phase I (Batch 1) Phase I (Batch 2), and Phase II (Batch 1) of the National Solar Mission(NSM) are inconsistent with Article 2.1 of the TRIMs Agreement and Article III:4 of the GATT 1994, and are not covered by the derogation in Article III:8(a) of the GATT 1994. Details of the ruling are available in public domain at https://www.wto.org/english/tratop\_e/dispu\_e/ds456\_e.htm.

(b): India like other WTO member countries is committed to its WTO obligations. However, it is free to make programmes to support domestic manufacturers within the WTO norms.

(c): Around 750 MW capacity has been installed in the country with the DCR, out of a total of about 8700 MW capacity installed.

(d): State-wise details of solar power capacity installed in the country including Delhi (including those under JNNSM) during the last two years and the current year are given at Annexure.

(e): Yes, Madam. Development of solar power in the country is taking place with indigenous as well as imported  solar  equipments  and  components.  Cost  of  solar  power  has  to  be  at  grid  parity  in  India  to encourage DISCOMS to buy. India does not have enough manufacturing capacity currently for cells and modules to cover its full demand. Therefore imports of cells and modules is taking place. The situation may change in future.

(f): The  Government  is  promoting    solar  energy  through  fiscal  and  promotional  incentives  such  as capital  and/or  interest  subsidy,  tax  holiday  on  the  earnings  for  10  years,    generation  based  incentive, accelerated depreciation,  viability gap funding (VGF), concessional excise and custom duties, and foreign direct  investment  up  to  100  per  cent  under  the  automatic  route  etc.  for  promoting  solar  industry  in  the country.  This  apart,  the  Government  has  been  supporting  solar  manufacturing  by  way  of  various mechanisms such as Modified Special Incentive Package Scheme (M-SIPS) of Department of Electronics & Information Technology (DeitY).

## ANNEXURE REFERRED TO IN REPLY TO PART (d) OF LOK SABHA UNSTARRED QUESTION NO. 350 FOR 17.11.2016

| S.No.   | State                                     |   Installed Capacity during 2014-15 (in MW) |   Installed Capacity during 2015-16 (in MW) |   Installed Capacity during 2016-17 (in MW) (as on 31.10.2016) |
|---------|-------------------------------------------|---------------------------------------------|---------------------------------------------|----------------------------------------------------------------|
| 1       | Andhra Pradesh                            |                                      126.77 |                                      435.11 |                                                         395.08 |
| 2       | Arunachal Pradesh                         |                                        0    |                                        0.24 |                                                           0    |
| 3       | Bihar                                     |                                        0    |                                        5.1  |                                                          90    |
| 4       | Chhattisgarh                              |                                        0.5  |                                       85.98 |                                                          34.98 |
| 5       | Gujarat                                   |                                       83.65 |                                      119.12 |                                                          19.01 |
| 6       | Haryana                                   |                                        2.5  |                                        2.59 |                                                           2    |
| 7       | Jharkhand                                 |                                        0    |                                        0.19 |                                                           0.65 |
| 8       | Karnataka                                 |                                       46.22 |                                       68.24 |                                                         194.62 |
| 9       | Kerala                                    |                                        0    |                                       13.02 |                                                           0    |
| 10      | Madhya Pradesh                            |                                      205    |                                      217.79 |                                                          35.01 |
| 11      | Maharashtra                               |                                       82.23 |                                       25.01 |                                                           0.3  |
| 12      | Odisha                                    |                                        2.26 |                                       35.16 |                                                           0    |
| 13      | Punjab                                    |                                      168.75 |                                      219.79 |                                                         166.14 |
| 14      | Rajasthan                                 |                                      228.85 |                                      327.83 |                                                          31.23 |
| 15      | Tamil Nadu                                |                                       54.12 |                                      919.24 |                                                         493.59 |
| 16      | Telangana                                 |                                       61.25 |                                      360.8  |                                                         435.95 |
| 17      | Tripura                                   |                                        5    |                                        0    |                                                           0    |
| 18      | Uttar Pradesh                             |                                       42.16 |                                       72.24 |                                                           0    |
| 19      | Uttarakhand                               |                                        0    |                                       36.15 |                                                           0    |
| 20      | West Bengal                               |                                        0    |                                        0.56 |                                                           4    |
| 21      | Andaman & Nicobar                         |                                        0    |                                        0    |                                                           0    |
| 22      | Delhi                                     |                                        0.32 |                                        8.82 |                                                           9.59 |
| 23      | Lakshadweep                               |                                        0    |                                        0    |                                                           0    |
| 24      | Puducherry                                |                                        0    |                                        0    |                                                           0    |
| 25      | Chandigarh                                |                                        2.5  |                                        2.31 |                                                           0    |
| 26      | Daman & Diu                               |                                        0    |                                        4    |                                                           0    |
| 27      | J&K                                       |                                        0    |                                        1    |                                                           0    |
| 28      | Himachal Pradesh                          |                                        0    |                                        0.2  |                                                           0    |
| 29      | Mizoram                                   |                                        0    |                                        0.1  |                                                           0    |
| 30      | Assam                                     |                                        0    |                                        0    |                                                          10    |
| 31      | Others(PSU/channel partner )under Rooftop |                                        0    |                                       58.31 |                                                          42.61 |
|         | Total                                     |                                     1112.07 |                                     3018.88 |                                                        1964.76 |