The WTO and Development Policy Space in India

Abstract

International trade law scholarship has offered different approaches for assessing how international trade law impacts domestic policy space for developing nations. However, much of this scholarship has failed to address the realities of how domestic policy implementation affects development policy space. This Article argues for a policy implementation-based approach to assessing development policy space by analyzing India’s response to two recent WTO disputes: India-Solar Cells (2013), and India-Export Related Measures (2018). In the India-Solar Cells dispute, the U.S. challenged India’s inclusion of local content requirements in its National Solar Mission program. In India-Export Related Measures, the U.S. challenged India’s export subsidies programs, including its Special Economic Zones (SEZs) policy. The WTO Appellate Body found that India’s local content requirements in India-Solar Cells violated international trade law norms, while the WTO Panel in India-Export Related Measures will adjudicate on the request for consultations in India-Export Related Measures in 2019. In examining how domestic policy implementation impacts policy space, this Article fills an important gap in the existing literature, which has paid insufficient attention to the domestic policy context of industrial policy in relation to international trade disputes. I argue that key dimensions of industrial policy regimes shape how nations respond to WTO decisions by implementing alternative WTO-compliant policies: the policy goals, tradeoffs and viability of policy alternatives; the nature and size of industrial sectors; and the existence of broader policy transitions. The Article analyzes aspects of policy regimes governing India’s solar industrial policy and SEZ policy, and explores the nature of policy implementation and adaption in response to WTO adjudication in order to fully assess policy space in these sectors. The Article concludes by suggesting the need to look beyond international law norms and WTO dispute resolution to the realities of the domestic policy landscape in order to provide a more complete account of how international trade law impacts development policy space.