National Solar Mission Case Analysis

The dispute was with respect to certain domestic content requirements imposed under the National Solar Mission (NSM). Under this mission, solar developers were required to purchase or use solar cells or solar modules of domestic origin in order to enter into and maintain certain power purchase agreements. The domestic content requirement (DCR) measures were maintained through various instruments under Phase I or Phase II of the NSM. The US claimed that these measures accord less favorable treatment to imported products than to like products of national origin, therefore, inconsistent with Article III: 4 of the GATT 1994. It also claimed that these measures are investment measures related to trade in goods, therefore, inconsistent with Article
United States argued that the purchase of domestic solar cells and modules was mandatory in order to obtain an advantage, therefore, DCR measures fall under paragraph 1(a). India’s arguments on this issue were consistent with its view on the relationship between the TRIMs agreement and the GATT. India did not present any specific arguments in connection with the terms of TRIMs Illustrative List. In the absence of categorical arguments from India’s side, the panel decided to examine the evidence and arguments advanced by the United
The mission aims to establish the country as a solar manufacturing hub, to feed both a growing domestic industry as well as global markets. The solar mission, while leveraging other government policies, looks to provide favorable regulatory and policy conditions to develop domestic manufacturing of low-cost solar technologies, with the support of significant capital investment and technical innovation.”
Moreover, India acknowledged that the National Solar Mission seeks to ensure that part of the procurement of solar power is from domestically manufactured cells and modules. In the light of these evidences, the panel found that the DCR measures in question were investment measures within the meaning of the TRIMs Agreement.
Whether the DCR measures "require the purchase or use by an enterprise of products of domestic origin"
The Panel recalled that the guidelines and request for selection documents dictate to the solar power developers that if they wish to participate in the National Solar Mission then they have to use solar cells and modules manufactured in India. Accordingly, Panel found that the measures in question require the purchase or use by an enterprise of products of domestic origin within the meaning of paragraph 1(a) of the Illustrative