India--Certain Measures Relating to Solar Cells and Solar Modules

India--Certain Measures Relating to Solar Cells and Solar Modules . WT/DS456/AB/R. At https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds456_e.htm. World Trade Organization Appellate Body, September 16, 2016 (adopted October 14, 2016).

International Decisions: Edited by David P. Stewart

*. This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2016S1A3A2925230).

In a proceeding that challenged the domestic content requirements (DCRs) of India's solar energy program, the Appellate Body of the World Trade Organization (WTO) upheld the panel determination that the Indian government's measures violated its international obligations.¹The decision offers new insights into certain exceptions for environmental policies under the multilateral trading system and elaborates on the relevance of other international legal regimes to the compliance issue under WTO law. Further, it has the potential to increase export opportunities of many countries in the Indian renewable energy market.

Under the so-called "Jawaharlal Nehru National Solar Mission" (2010) aimed at boosting the country's grid-connected solar power capacity, the Indian government entered into long-term agreements with solar power developers to purchase "green" electricity at guaranteed rates, subject to the DCRs mandating the use of locally produced solar cells and solar modules (also known as "solar panels"). The United States challenged the Indian program on the grounds that the DCRs favored domestic solar products to the detriment of foreign competitors. In its defense, India invoked certain policy flexibilities under the General Agreement on Tariffs and Trade (GATT).²On February 24, 2016, a WTO panel determined that the measures at issue were inconsistent with the national treatment provisions of Article III:4 of the GATT, as well as Article 2.1 of the Agreement on Trade-Related Investment Measures.³

In sustaining the panel's decision, the Appellate Body concluded that India had failed to prove how three GATT provisions--Articles III:8(a), XX(j), and XX(d)--could justify its DCRs. The ruling offers new perspectives on these significant provisions and provides food for thought on certain procedural issues of systemic importance.

As to the first provision, GATT Article III:8(a) exempts government procurement (defined as "the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale") from the...