Crushing a Fledgling Industry

On 24 February, the World Trade Organization (WTO) ruled against the domestic content requirements (DCR) of India’s solar mission. The verdict is a response to a complaint filed in 2013, and reasserted a year later, by the United States (US), which alleged that DCR’s mandate of using solar cells and modules made in India—two critical components that transform solar energy into power—was detrimental to imports of such products. WTO had issued a similar verdict in September 2015 when it ruled that DCR contravened “international rules of import.” India had appealed against the ruling. The February verdict marks yet another defeat for the country at the WTO.

The US solar industry has welcomed the WTO verdict saying that it will allow companies from the country a role in India’s climate change plans. A section of the industry has also welcomed the ruling arguing that a competitive solar equipment industry bodes well for clean energy. Some environmentalist groups have interpreted the ruling as a blow to India’s solar mission. Both have got it wrong, ironically, for the same reason. India’s solar equipment industry today is no match to imports from the US, China and Europe and the country’s solar mission does not hinge on DCR.