World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

US FQ 21:

(on US 51)

Report by the Secretariat (WT/TPR/S/249):III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (vi) Import prohibitions, restrictions, and licensing: Page 58, Section III(2)(vi)(d):

The United States understands that India offers subsidized rates (i.e., above market) when purchasing solar power generated by projects under the Jawaharlal Nehru National Solar Mission (JNNSM). A developer may only get these subsidized rates, however, if it complies with what the JNNSM guidelines call "domestic content requirements," which require that certain solar equipment used by developers in such projects be manufactured in India, i.e., of domestic (Indian) origin. How does India view these requirements in light of its obligation under Article 3.1(b) of the SCM Agreement?

Reply: In India's views, the power purchase arrangements under the India's Jawaharlal Nehru National Solar Mission (JNNSM) do not involve subsidies which are prohibited under Article 3.1 (b) of ASCM.

U.S. Follow-Up Question: Please explain how the prices are determined for purchasing solar power generated by projects under the JNNSM. Are the prices paid for such power the same as prices paid for power (whether of solar origin or otherwise) purchased from entities other than developers under the JNNSM?

Reply: Under the first phase of JNNSM, which is under implementation, grid connected solar power projects are to be set up on build, own and operate basis. NTPC Vidyut Vyapar Nigam (NVVN) will purchase solar power from the selected project developers at a rate determined through bidding process. The project developers are expected to decide the tariff to be offered by them in the bidding process. Under the JNNSM, no other mechanism exists for purchase of grid connected solar power from any entity who wishes to set up a new grid solar power plant. In the bidding process a project developer is free to decide whether to use crystalline silicon modules or modules made from any other technology option globally available. The selection of project through bidding process is independent of choice of technology.