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Q27 (IAS/2017) Economy › Economy Current Affairs › Industrial and investment policy Official Key

The term 'Domestic Content Requirement' is sometimes seen in the news with reference to

Result
Your answer: —  ·  Correct: A
Explanation

Under National Solar Mission of GOI, the guidelines mandated that 30 per cent of a project must have domestic content requirements, so as to incentivise the growth of domestic solar cells and module manufacturing industries.[1] However, this was challenged by a US trade representative in the WTO as violative of 'National Treatment' principle.[1] Government of India lost the case after the judgement passed by GC against India was upheld by WTOAB in 2016.[1] This made 'Domestic Content Requirement' a prominent term in Indian news, specifically in the context of solar power development. The requirement aimed to boost domestic manufacturing of solar panels and cells by mandating that a certain percentage of components used in solar projects be sourced locally. This case brought significant attention to the concept of domestic content requirements in India's renewable energy sector, particularly solar power production.

Sources
  1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > CASE OF SOLAR PANELS UNDER NATIONAL SOLAR MISSION > p. 539
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Q. The term 'Domestic Content Requirement' is sometimes seen in the news with reference to [A] Developing solar power production in our cou…
At a glance
Origin: Mixed / unclear origin Fairness: Low / Borderline fairness Books / CA: 2.5/10 · 0/10
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A classic 'Term in News' question derived from a high-profile WTO dispute (India vs. US). It sits squarely at the intersection of Economy (Trade) and Environment (Solar Mission). If you tracked major trade disputes or renewable energy policies in 2015-17, this was unmissable.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Is the term 'Domestic Content Requirement' used in Indian news in reference to developing solar power production in India?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > CASE OF SOLAR PANELS UNDER NATIONAL SOLAR MISSION > p. 539
Presence: 5/5
“Under National Solar Mission of GOI, the guidelines mandated that 30 per cent of a project must have domestic content requirements, so as to incentivise the growth of domestic solar cells and module manufacturing industries. However, this was challenged by a US trade representative in the WTO as violative of 'National Treatment' principle. Government of India lost the case after the judgement passed by GC against India was upheld by WTOAB in 2016. On the other hand, India won another major solar case against the United States in 2019 for violation of National Treatment principle by the United States. The WTO panel upheld India's claim that renewable energy subsidies and local content requirements mandated by eight American states were violative of the principle of 'National Treatment'.”
Why this source?
  • Snippet explicitly uses the phrase 'domestic content requirements' in the context of the National Solar Mission (India).
  • Links the DCR policy (30% domestic content) directly to solar project guidelines in India.
  • Notes the policy generated international attention (WTO dispute), showing it is a subject of public/policy discussion.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > Solar Photovoltaics Manufacturing in India > p. 451
Presence: 3/5
“• According to the Ministry of New and Renewable Energy report (2018), India has an annual ۰ solar cell manufacturing capacity of about 3 GW while the average annual demand is 20 GW. The shortfall is met by imports of solar panels mainly from China.• In the solar panel-manufacturing sector, the Indian government allows 100 per cent ۰ foreign investment as equity and it qualifies for automatic approval.• India now has the third-largest solar installed capacity in the world.”
Why this source?
  • Documents a large gap between domestic solar cell manufacturing capacity and demand (3 GW vs 20 GW).
  • Explains the underlying rationale for domestic-content measures — to reduce import dependence and build local manufacturing.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 15: Infrastructure > 15.14 Indian Economy > p. 450
Presence: 3/5
“• Solar Study Lamps Around 60 lakh solar study lamps have been distributed till \overline{a}2019-20 to the students under solar study lamp scheme in five states. • National Solar Mission Aims to reduce the cost of solar power through drafting long-term policy, intensive research and development, production of raw material components and product. All three components combined, the scheme aims to add a solar capacity of 25,750 MW by 2022. National Institute of Solar Energy (NISA) is located at Gurugram, Haryana.”
Why this source?
  • Identifies the National Solar Mission as India's long-term policy instrument for solar expansion, the policy within which DCR was applied.
  • Provides policy context linking objectives (cost reduction, R&D, production) to measures like domestic content.
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Statement analysis

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Statement analysis

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