Lok Sabha Question No. 768 (UNSTARRED), answered on 2016-04-28
Subject: Dispute in WTO over JNNSM
Ministry: NEW AND RENEWABLE ENERGY
Asked by: MUTHAMSETTI SRINIVASA RAO (AVNTHI), M. B. RAJESH, CHANDU LAL SAHU, DUSHYANT CHAUTALA

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA

## UNSTARRED QUESTION NO. 768

TO BE ANSWERED ON 28.04.2016

## DISPUTE IN WTO OVER JNNSM

768. SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI): SHRI M.B. RAJESH: SHRI CHANDU LAL SAHU: SHRI DUSHYANT CHAUTALA:

Will the Minister of New and Renewable Energy be pleased to state:

- (a) whether there is any dispute in World Trade Organisation (WTO) over the Jawaharlal Nehru National Solar Mission (JNNSM);
- (b) if so, the details thereof;
- (c) whether the WTO has ruled in the US favour and against India's Domestic Content Requirements  (DCR)  for  solar  products  under  the  national  solar  mission,  if  so,  the  details thereof;
- (d) whether this is a setback to India's Solar Mission and the Government had agreed to withdraw the DCR option for private companies, if so, the details thereof;
- (e) whether an anti-dumping duty was also withdrawn on solar panels, if so, the measures proposed by the Government to make the national solar mission a success and address the challenges to local industry due to this decision; and
- (f) whether  the  Government  has  appealed  against  the  WTO  ruling,  if  so,  the  details thereof  along  with  the  steps  being  taken  by  the  Government  to  encourage  the  domestic manufacturers for growth of this sector in the country?

## ANSWER

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

(a)&(b): Yes, Madam. The United States had filed a dispute before the World Trade Organization  (WTO)  on  India's  domestic  content  requirement  in  the  procurement  of  solar cells  and  modules  in  some  schemes  under  the  Jawaharlal  Nehru  National  Solar  Mission (JNNSM).  The United States (US) has claimed that the domestic content requirement clause is inconsistent with GATT 1994 and TRIMs Agreement of WTO.

(c)&(d): Yes, Madam. The WTO panel has ruled that Domestic Content Requirement (DCR) measures under Phase I (Batch 1), Phase I (Batch 2), and Phase II (Batch 1)

of the National Solar Mission 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 India has defended its claims in WTO as per the provisions contained under Article III: 8(a) and General Exemption clauses of GATT 1994. However, India has filed an Appeal in WTO against the ruling.

(e): Anti-dumping duty was not imposed on solar panels, therefore, there is no question of withdrawing anti-dumping duty.  While on one side cost of power has to be kept as low as possible in order to reduce the burden on distribution companies, the domestic manufacturing industry has also to be supported.  Therefore, while on one side import of panels without any anti-dumping duty has  resulted  in  reduction  in  cost  of  solar  power,  provision  for  domestic content requirement has been made in order to provide adequate market for the domestic solar cell manufacturers.

(f): India has filed a notice of appeal in WTO against the Panel ruling on 20.04.2016 in the WTO dispute.

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