Tuesday, June 10, 2014: Even as the dispute settlement arm of the World Trade Organisation (WTO) has decided to set up a dispute settlement panel after the US complained a second time over local content requirement in India’s solar energy programme, many believe the spat could turn into a larger controversy at the WTO platform.
Hinting that consultations with India over opening up its solar market further had reached no logical conclusion, the United States had demanded that the World Trade Organisation’s dispute settlement board should step in and create a panel to review the dispute. India had blocked the first request by the US to set up a dispute settlement panel remaining firm on its earlier stand that only locally made products be used in its solar industry. Washington argues that India’s stand over the issue impedes competition, hence the spat.
The WTO was therefore obliged to set up the panel following the second request. According to the US, certain provisions that mandate the use of locally manufactured inputs under India’s Jawaharlal Nehru National Solar Mission discriminate against foreign manufacturers thus violating WTO norms. However, India contends that power generated under the mission is bought by a government agency which is a government procurement and therefore lies outside the purview of WTO rules.
Meanwhile, the development is being closely observed by other nations with countries like the EU, Brazil, China, Norway, Canada, Malaysia, Russia, Turkey, Korea and Japan requesting to be members ‘reserving their third party rights’ in the dispute.
