The WTO’s Appellate Body agreed with an earlier WTO panel report that India’s localisation regulations are a breach of international trade rules.
The ruling requires India to come into WTO compliance, although it was not immediately clear when it would do so.
“This report is a clear victory for American solar manufacturers and workers, and another step forward in the fight against climate change,” said US Trade Representative Michael Froman. “Trade enforcement is critical for ensuring that American clean energy goods and services can compete around the world.”
He said while the US supports rapid deployment of solar energy in India and elsewhere, the Delhi government’s local content rules would actually slow that process by requiring the use of more expensive and less efficient equipment. That would make it more difficult for clean energy sources to be cost-competitive.
Since India enacted those rules in 2011, American solar exports to India have declined more than 90%, according to the US government.
The US Solar Energy Industries Association (SEIA) applauded the ruling. “The National Solar Mission’s local content requirement unfairly discriminated against US manufacturers and today’s decision will help even out the playing field,” Christopher Mansour, vice president of federal affairs for SEIA, said in a statement.
India launched a WTO action of its own earlier this month over alleged subsidies for renewables in eight US states.