A panel has been set up by the World Trade Organisation (WTO) to resolve the dispute raised by India against the US with regard to the policies of eight American states in the renewable energy sector.

India had alleged that the domestic content requirement norms imposed by these eight US states are inconsistent with global trade rules, media reports said.

As both the countries failed to resolve the issue in the bilateral consultation process, India had sought formation of dispute resolution panel, reported PTI.

“The dispute settlement body of WTO has agreed to establish a panel. It will soon start the hearing, a government official reportedly said.

On September 9, 2016, India had requested consultation with the US under the dispute settlement system of WTO regarding alleged domestic content requirements and subsidies provided by these states in the renewable energy sector.

Under the norms of domestic content requirements, it is mandatory upon domestic companies to source a portion of input from local markets’ products.

India had alleged that the measures of those American states are inconsistent with WTO’s Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures, the report said.

They are inconsistent because they provide less favourable treatment to imported products vis-a-vis domestic products, and because the subsidies are contingent on the use of domestic over imported goods, India had stated in its application to WTO, reported PTI.

The eight states are Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota, the report said.

The request for consultation is the first step under the Dispute Settlement System of WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation, it added.