India will contest the ruling of World Trade Organisation (WTO) against India’s policy of local sourcing of components as part of the Jawaharlal Nehru Solar Mission. The verdict is seen as a setback for India’s Solar Mission aimed at ensuring energy security and its commitment to limit global warming.

India had recently five times increased its solar targets set in 2009 to 100,000 MW.


US had earlier challenged India’s decision to impose a stipulation that solar cells and solar modules be sourced locally in the WTO. The WTO gave a verdict in favour of US.

Earlier India did soften its stand by agreeing to apply the stipulation for solar panels used in govt. sector consumption. It also assured that power generated from them would not be commercially sold. But US went ahead to the WTO and filed its complaint against India’s policy.

Larger issue:

There is a trade rift in globally inter-connected world and the WTO ruling to apply level playing field in an imperfect and highly unequal world is highly unjustified. In US at least 9 states have policies to protect the interest of domestic manufacturers. Hence the aim should be to balance trade obligations with social compulsions.