Undimmed

Nurturing Indian solar-power technology within the strictures of the WTO

The National Solar Mission makes it an explicit goal to increase domestic production of solarpower technology. The government aims to create a total solar-power generation capacity of 100 gigawatts by 2022, with 8 gigawatts of capacity solely from indigenous solar modules.
dhiraj singh / bloomberg / getty images
The National Solar Mission makes it an explicit goal to increase domestic production of solarpower technology. The government aims to create a total solar-power generation capacity of 100 gigawatts by 2022, with 8 gigawatts of capacity solely from indigenous solar modules.
dhiraj singh / bloomberg / getty images

In January 2010, the Indian government launched the National Solar Mission, or NSM, a phased plan to promote solar power aimed at achieving a generation capacity of 20 gigawatts of solar electricity by 2022. Last year, it revised that number upwards, to 100 gigawatts, while keeping the deadline the same—meaning that solar power now accounts for more than half of the 175 gigawatts of generation capacity from renewable resources that the government plans to create by that year. Even though solar power forms less than 2 percent of India’s total generation capacity at present, the revision signalled a growing confidence in the country’s solar-power sector on the back of promising early results. In its first phase, the NSM aimed to create a generation capacity of 1.1 gigawatts by 2013; in March 2013, that capacity was already 1.7 gigawatts. Since then, the figure has trebled in less than three years, and this February it stood at 5.5 gigawatts. By March 2017, it is projected to grow to 20 gigawatts.

As India’s solar-power generation capacity has risen, so too have the fortunes of the country’s manufacturers of solar-power technology. According to government data, as of 2014 this manufacturing sector was growing at an annual rate of over 60 percent, and Indian manufacturers had an annual production capacity of 1,386 megawatts’ worth of photovoltaic cells and 2,756 megawatts’ worth of solar modules—that is, assemblies of cells. Promoting such manufacturing is an explicit NSM goal, and by 2017 the mission aims to create a domestic capacity to produce solar modules capable of generating 4 gigawatts’ worth of power. In keeping with this project, the government has been signing agreements to purchase solar electricity from power companies on the condition that certain shares of the cells and panels they use be of Indian provenance—a stipulation called a “domestic content requirement,” or DCR.

These DCRs have angered foreign firms looking to sell solar-power technology in India. In early 2013, the United States complained against India’s use of them to the World Trade Organisation, which arbitrates in international business disputes and works to reduce obstacles to global trade. This February, after considering arguments from both sides, a WTO dispute panel adjudged the NSM’s DCR measures to be illegal. In its ruling, the panel cited provisions in the General Agreement on Trade and Tarriffs, or GATT, to which India is signatory, prohibiting member countries from giving preference to domestic products over imported ones.

Hippu Salk Kristle Nathan Hippu Salk Kristle Nathan is a researcher in development studies, and an assistant professor at the National Institute of Advanced Studies, Bengaluru. He can be reached at hsknathan@nias.iisc.ernet.in.

Keywords: India WTO solar power World trade organisation National Solar Mission Solar technology
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