India to respond to US WTO notice on domestic sourcing rules under National Solar Mission

India has said it will respond to the United States’ notice challenging the domestic sourcing requirement in its National Solar Mission in 10 days’ time as stipulated under the rules of the World Trade Organization.

The US, on Wednesday, filed an official dispute against India at the WTO claiming that the domestic sourcing rules flouted global trade norms. It has asked for consultations with India on the matter.

“Our Mission in Geneva has been delivered a notice under Dispute Settlement Understanding that the US has sought a consultation in respect to domestic content policy of National Solar Mission. According to the laid-down procedure, India has to respond within 10 days. We have received the notice and will respond within the prescribed time period,” said Rajiv Kher, Additional Secretary, Commerce Department.

On the basis of the consultations that the US has with India, it will decide whether it wants to take the dispute further by asking for a dispute settlement panel to settle the issue.

India’s national solar program required solar energy producers to use Indian-manufactured solar cells and modules, which in fact put foreign solar products at a disadvantaged position. India has favoured its own solar products since Jan 11, 2010, when it launched national solar program. India also promises solar energy developers participating in the program that the government will buy a certain amount of solar power at a highly subsidized tariff rate, provided that they use Indian made solar equipment instead of imports.

Consultations are the first step in the WTO dispute settlement process. Under WTO rules, if the matter is not resolved through consultations within 60 days, the accuser may request the establishment of a WTO dispute settlement panel.

The US has now placed six complaints against India at the WTO, and while India has eight against America.