As part of the Paris Climate Agreement India, rather than agree to a carbon ceiling, promised to make their economy more carbon efficient. A centerpiece in achieving their promise was the creation of the “National Solar Mission”, launched in 2011. It promised to increase India’s solar capacity to 100 GW by 2022, reduce the cost of solar through R&D and local production, with the eventual goal of making India a global leader.
The US, however, took exception to the Mission’s policy of producing locally and filed a complaint with the World Trade Organization. A panel for the WTO ruled in favour of the US, finding that the Mission discriminates against imports. It should be noted that the US subsidises the same market at home.
Some economists have argued that opening up the Indian market to international trade will allow the sector to become more efficient, as it must innovate to compete. Additionally, local companies would have access to more efficient foreign products and as a result deliver a better product. India has argued that by fostering an industry at home initially and slowly delivering it to market it will be able to contribute the continuous lowering of renewable costs. It also argued that it must manufacture locally in order to meet its own demands.
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