India’s case on its solar policy

The Centre is without doubt justified in saying it will contest the ruling in the World Trade Organisation against India’s policy of local sourcing of components as part of the Jawaharlal Nehru National Solar Mission. The U.S. had taken to the WTO its case against India’s policy of favouring domestic inputs in solar cells and solar modules, arguing that it amounted to a discriminatory trade practice and distorted the game. The verdict, which came last month, is a setback for India’s Solar Mission, seen as the bedrock of efforts aimed at ensuring energy security and meeting the country’s commitment to the collective global plan to limit global warming. In fact, over the last year India has scaled up its solar power ambitions, with the Narendra Modi government increasing fivefold the target set in 2009 to 100,000 MW. The WTO ruling obviously threatens the financial viability of the plan. India did offer to modify its stand on the issue, and agreed to apply the domestic content requirement only for buying solar panels used for government sector consumption. It even assured Washington that power generated from such subsidised panels would not be sold for commercial use. The U.S., however, did not agree. The challenge before the government is to sort out trade practice concerns in a manner that keeps the Solar Mission firmly on track. How it resolves the issue — and it would be well-advised to avoid standing on ego — will have repercussions not only on the country’s green energy aspirations, but also on its capacity to negotiate sectoral roadblocks to its global-level “Make in India” lobbying.

The trade rift and the WTO ruling on the solar issue have yet again brought to the fore the absurdity of seeking a level playing field in an imperfect, highly unequal world. Nations often raise protection walls in some form or the other to suit their convenience or to further their political interests. The U.S. is no exception. At least nine States in that country have programmes that provide protection to domestic manufacturers. In this inter-connected environment, the challenge really lies in balancing global trade obligations with domestic social compulsions. If the U.S. cannot have other countries engaged in practices that disadvantage American workers and American businesses, as President Barack Obama said, India too cannot wish away the job concerns of its people. By providing a ‘green angle’ to its solar power programme, India has added a new dimension to the ongoing dispute. As countries across the world race to take steps to limit climate change, concerns like these will test international organisations and rule-making to work out solutions that do not obstruct, or even delay, these efforts. The world indeed requires a spirit of accommodative co-existence for the larger global good.