India and US in WTO face-off over solar power ruling compliance

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Stark differences have cropped up in talks between India and the US on compliance with a World Trade Organisation (WTO) ruling last year that went against India for favouring local manufacturers in its solar power programme on a petition filed at the multilateral body by the world’s largest economy. Sources told FE that the US wants India to scrap all the tenders awarded under the latter’s national solar
mission and float them afresh so that more foreign players can participate.

However, India has made it clear that it can comply with the WTO ruling only prospectively for the sake of natural justice and the tenders already awarded (before its appeal against the ruling was rejected by the WTO in September last year) can’t be scrapped now. India has stressed that it has already complied with the ruling and stopped issuing solar tenders with domestic content requirement (DCR). According to an official estimate, about 500 MW of solar projects (with DCR stipulation), which were in the pipeline, have been affected by the WTO ruling.

However, there will be no changes in the terms and conditions for solar projects with about 3,000 MW of generation capacity for which tenders were awarded earlier and power purchase agreement with states signed, official sources said.
In a bid to promote local manufacturing, the government had earlier mandated that a certain portion of capacity addition would be reserved for domestically sourced modules under the national solar mission. The companies that use such modules are eligible for participating in the tariff-based bidding process.

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