Report by the Secretariat (WT/TPR/S/249): II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES :(4) Investment Regime:(ii) Foreign investment regime: Page 33, Paragraph 40:
India's Jawaharlal Nehru National Solar Mission (JNNSM) appears to condition investment in certain solar projects on 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 2 of the TRIMS Agreement and the Illustrative List thereto?
Reply: The "domestic content requirements" in India's Jawaharlal Nehru National Solar Mission (JNNSM) is not inconsistent with India's obligation under Article 2 of the TRIMS Agreement and the Illustrative List thereto.
U.S. Follow-Up Question: The "domestic content requirements" require that investors use certain domestically-manufactured solar equipment in order to be eligible to develop solar projects under the JNNSM. In this light, please explain how these domestic content requirements are not "mandatory" measures that must be complied with to obtain an advantage, and that require the purchase of domestic products, as set out in the Illustrative List of the TRIMS Agreement.
Reply: The immediate aim of the JNNSM is to focus on setting up an enabling environment for solar technology penetration in the country both at a centralized and de-centralized level. GATT Article III:8(a) permits exemption from national treatment principle in respect of procurement by governmental agencies of products for specified purposes and therefore the programme is not inconsistent with the provisions of Article 2 of TRIMS. In India's views the domestic content requirement is not with a view to obtain an advantage and is therefore not covered by the illustrative list of TRIMS.
