India Issues Guidelines To All States Over WTO Solar Equipment Compliance

The Ministry of New & Renewable Energy in India has issued guidelines to all states related to the decision of the World Trade Organisation related to obligate use of Indian-made solar cells and modules.

In a letter addressed to power sector officials in all states, the Ministry stated that as the WTO ruled against the Domestic Content Requirement (DCR) program, Indian states cannot mandate the use of Indian-made solar equipment. 

Under the DCR program, project developers are required to use only Indian-made solar power equipment to set up projects. The program was launched by the government to ensure support for Indian solar module manufacturers which have been outpaced by the overwhelming share of imported solar modules in the Indian market.

The WTO passed its decision in September 2016, and a deadline of 14 December 2017 was agreed by India to finish all work on DCR projects. India can still set up solar power projects under the DCR program, but the electricity generated must be procured by the government or its entities itself and cannot be sold for commercial gains.

To meet the above condition, India was forced to cancel the allocation of a 250 megawatt solar power project awarded to Azure Power under the DCR program at a tariff of Rs 3.14/kWh (¢4.9/kWh). A couple of government-owned companies would have made commercial gains and thus violated the WTO decision.

The Ministry issued a deadline of 31 December 2017 to all DCR project developers to complete their projects. Additionally, it directed all states to provide advance information if they plan to float a DCR tender in the future.

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