India’s case on its solar policy

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The Centre is without doubt justified in saying it will contest the ruling in the World Trade Organisation against India’s policy of local sourcing of components as part of the Jawaharlal Nehru National Solar Mission. The U.S. had taken to the WTO its case against India’s policy of favouring domestic inputs in solar cells and solar modules, arguing that it amounted to a discriminatory trade practice and distorted the game. The verdict, which came last month, is a setback for India’s Solar Mission, seen as the bedrock of efforts aimed at ensuring energy security and meeting the country’s commitment to the collective global plan to limit global warming. In fact, over the last year India has scaled up its solar power ambitions, with the Narendra Modi government increasing fivefold the target set in 2009 to 100,000 MW. The WTO ruling obviously threatens the financial viability of the plan. India did offer to modify its stand on the issue, and agreed to apply the domestic content requirement only for buying solar panels used for government sector consumption. It even assured Washington that power generated from such subsidised panels would not be sold for commercial use. The U.S., however, did not agree. The challenge before the government is to sort out trade practice concerns in a manner that keeps the Solar Mission firmly on track. How it resolves the issue — and it would be well-advised to avoid standing on ego — will have repercussions not only on the country’s green energy aspirations, but also on its capacity to negotiate sectoral roadblocks to its global-level “Make in India” lobbying.

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