Trump effect on Indian solar sector

Should India expect some changes in the US’s stands on solar dispute on DCR?
 India is striving hard to grow the solar sector as well as the country is encouraging the domestic manufacturing. With an objective to make India a solar hub the Ministry of New and Renewable Energy (MNRE) began with Jawaharlal Nehru National Solar Mission in the year 2010 to achieve its target of grid connected solar power capacity of 20,000 MW by 2022 in three Phases which includes Phase 1 up to 2012-13, Phase 2 from 2013 to 2017 and the Phase 3 from 2017 to 2022.
MNRE launched Phase 2, Batch 1 to implement 750 MW capacity of grid connected solar power project. Similarly, during Phase 2 the policy of Domestic Content Requirement (DCR) was introduced with the intent to encourage domestic manufacturing of the components of solar generation equipment which includes the solar cells and modules.
It is important to note that India is a member of World Trade Organisation (WTO) and was also bound by its agreements like the General Agreement on Tariffs and Trade (GATT), Agreement on Trade Related Investment Measures (TRIMS) and Agreement on Subsidies and Countervailing Measures (ASCM) that raised significant concern on the compatibility of the domestic content requirement.
Recently, India lost its appeal against WTO on solar dispute on DCR and the country faced a huge setback. 
India was held by the panel that it had violated global trade rules such under the GATT and WTO’s agreement on TRIMS by forcefully mandating local content requirements on local solar power developers.
The US had brought up this issue because it considers that India’s domestic content requirements were inconsistent with WTO rules that prohibit discrimination against imported products. The Adjudicating Body (AB) agreed with the panels that India favours domestic products over imported products.  
This is indeed a complex issue and how will it be solved is a big question. With changes in the US government should India expect some changes in the US’s stands on solar dispute on DCR?
In his views in the US’s stands on the solar dispute on DCR under Trump regime Ashok K. Puri, Managing Director, Hinduja National Power Corporation Ltd believes that DCR is a critical issue which should be taken up at the diplomatic level. He adds, “The discord over DCR is an issue which the dispute resolution mechanism at the WTO is currently engaged in. However, one must avoid speculating the incoming US Government’s stance on global trade and globalisation, solely on the basis of the statements made during the campaign.”
Indian solar power developers are mandated to use locally manufactured cells and modules in preference to imported solar technology. “The WTO has now ruled that India had violated its rules by mandating the manufacturing of solar cells and modules in India,” points out Puri.Having overall a different perspective on solar dispute on DCR Ajay Kumar Dixit, CEO, Power, Vedanta Ltd observes that a key part of Trump’s campaign strategy was trade protectionism where he has committed himself to bring manufacturing jobs back to America and raise barriers to imports. “Trump has also criticised businesses which shift job opportunities overseas, taking specific example of India and China,” Dixit said.
“Under this scenario, it looks highly unlikely that Trump would support any expansion involving shift to a location of a factory outside the United States in whichever area it may be,” adds Dixit.
 
One must avoid speculating the incoming US Government’s stance on global trade and globalisation, solely on the basis of the statements made during the campaign.
Ashok K. Puri, Managing Director, Hinduja National Power Corporation Ltd
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It looks highly unlikely that Trump would support any expansion involving shift to a location of a factory outside the United States in whichever area it may be.
Ajay Kumar Dixit, CEO, Power, Vedanta Ltd

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