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Case Code: LAW005
Case Length: 9 Pages 
Period: 2010-2016    
Pub Date: 2017
Teaching Note: Not Available
Price: Rs.400
Organization :-
Industry : -
Countries : India, the US
Themes:  International trade
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

US-India Solar Trade Dispute

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In February 2013, the US dragged India to the World Trade Organization (WTO) for stipulating that solar modules and cells should be sourced locally in Phase I of the JNNSM. The US alleged that India had flouted norms that discouraged discriminatory practices against foreign companies. The US charged that India’s DCR under the JNNSM was inconsistent with the country’s national treatment obligations under Article III: 4 of the GATT and Article 2.1 of the Agreement on TRIMs. The US also stated that India could achieve its clean energy goals faster and more cost effectively by allowing solar technology imports from the US and other solar producers..

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India maintained that it had not violated any norms and pointed out that renewable energy programs in the states of Minnesota, Delaware, Connecticut, and Massachusetts offered benefits to companies that used renewable energy equipment manufactured in these states of the US. India asked the US how subsidies for the renewable energy programs in these American states were not prohibited as outlined in Articles 3.1 and 3.2 of the WTO Agreement on Subsidies and Countervailing Measures (ASCM). India cited the instance of a program in Massachusetts that offered an additional rebate to companies that used a ‘significant component’ that was manufactured by a firm with a ‘significant Massachusetts presence’......


In February 2016, the WTO ruled against India for violating GATT and TRIMs. The WTO panel asking India to “bring its measures into conformity with its obligations under the TRIMs Agreement and the GATT 1994”, said, “In cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment.” ..


Some industry experts felt that the WTO ruling against India came at a time when the solar manufacturers in India were already facing several issues such as declining prices of solar panels in global markets, sluggish demand in foreign markets, and competition from cheap Chinese imports in the domestic market... .