China has once again raised a ‘Specific Trade Concern’ against India’s regulation that permits the deployment of only domestically manufactured solar modules for all projects across the country.

The Approved List of Models and Manufacturers (ALMM) has barred Chinese companies from supplying modules for domestic solar projects. An aggrieved China considers ALMM as a trade barrier and is seeking to raise a trade dispute at the WTO.

China’s action comes days after India suspended the ALMM mandate for solar developers by a year. Projects commissioned by March 31, 2024, will be exempted from procuring solar modules from the list. The ALMM order was issued in 2019 and has since been extended several times.

At a meeting of the Committee on Technical Barriers to Trade (TBT) last week, when WTO members discussed standards and technical regulations that could contribute to addressing climate change challenges, China raised the ALMM issue as a specific trade concern (STC) for the fourth time.

India has traditionally relied on Chinese solar modules since domestic manufacturing is still finding its feet. The intent of ALMM was to catalyze indigenous manufacturing but production capacities have only started coming up lately and are not sufficient to meet the demand yet.

In February, Union Minister for Power and New and Renewable Energy R.K.Singh told a media house: “I put up a total barrier, ALMM, under which no Chinese company has been listed, so they can’t export. I put up the barrier, and at that time, Niti Aayog said it was a complete barrier. I said it was necessary.”

He had spoken of relaxing the ALMM mandate since India’s existing domestic capacity is not able to meet the demand. “As I said, I have about 70 GW of solar capacity under implementation, and the manufacturing capacity of 500 Wp (modules) and above is just 10 GW,” he had said.

While Singh has said India will fight it out at the WTO, it remains to be seen whether China will seek to escalate the issue. Most STCs raised at the TBT Committee fizzle out without turning into formal disputes. Only a small number of barriers to trade-related disputes end up as agenda items in the WTO dispute settlement mechanisms. The committee usually meets thrice a year.