MNRE Removes DCR Clause from 5 GW Viability Gap Funding Program

The amendments will help India put forward a solid case at the WTO by asserting that the country is in compliance with the trade norms


The Ministry of New and Renewable Energy (MNRE) has amended the guidelines for the implementation of Viability Gap Funding (VGF) program to develop 5 GW of grid-connected solar photovoltaic (PV) projects under the National Solar Mission (NSM) Phase-II Batch-IV.

In the amended guidelines, the MNRE has done away with the provision of Domestic Content Requirement (DCR) category grid-connected solar PV projects.

Commenting on the development, an MNRE official told Mercom, “This is for our compliance with World Trade Organization (WTO) norms. We, at MNRE, were reviewing all the program documents and came across the anomaly in VGF program and corrected it.”

“It is our duty to maintain transparency in the policies being implemented. The Dispute Settlement Body (DSB) recently convened, but the United States has still maintained that India is not in compliance. Our move is expected to have an effect on the way US perceives India’s stand on this issue, the MNRE official said.

The MNRE official further added, “The DCR tenders have been done away with, and with these amendments, now we have ensured that no policies can be cited by the United States delegation claiming we are not in compliance with the WTO norms.”

Recently, the U.S. objected to India’s request to establish a compliance panel to resolve the deadlock.  India had asked the WTO to evaluate the DCR program’s compliance with an earlier trade ruling, but the U.S. move had scuttled those efforts.

DCR auctions and tenders in India have already been scrapped. The implementing agencies like the National Thermal Power Corporation (NTPC) and the Solar Energy Corporation of India (SECI) have annulled the DCR category auctions and tenders to abide by the WTO norms.

This move by the MNRE, therefore, comes at an opportune time. If India puts forward its request for the second time, a compliance panel will have to be formed according to the WTO norms. Once the panel is put in place, the MNRE can then show the changes in its implementation guidelines as its proof for compliance with the norms.