Examining its Validity under GATT Article XX Exceptions – The RMLNLU Law Review Blog

By: Aman Anand 

INTRODUCTION

India’s struggle to manage international trade obligations along with the efforts to internalise its production sources is a long, uphill battle. The Approved Models and Manufacturers Order (hereinafter ‘ALMM Order’ or ‘the order’) was enforced to keep a list of approved manufacturers and models of solar modules and solar cells for usage in government and government-affiliated projects, but the same has been cited as a non-tariff trade barrier by China and was raised as a Specific Trade Concern at the Committee on TBT. With the admission of intent by the Minister of Power, the prospects for the order’s continued implementation appear uncertain. However, the key issue under examination is whether the ALMM order will violate the General Provisions on Trade and Tariff (hereinafter ‘GATT’). In this blog, I will analyse and evaluate the ALMM Order through the lens of the World Trade Organisation’s (hereinafter ‘WTO’) jurisprudence and the structural requirements of Article XX(b) and (g), arguing that the order does not fall under the given exemptions.

WHAT IS ALMM?

As stated above, ALMM is a government-regulated list of manufacturers and models of solar modules to establish quality control measures for solar modules used in government projects. The order was first mandated on January 2, 2019, to support domestic manufacturers by ensuring that only approved models and manufacturers could participate in government-led solar projects. The first official list (List I) for solar PV modules was released on March 10, 2021. List II for solar cells is scheduled to be released in 2026. However, the primary concern related to its implementation is the mandatory double-approval of both BIS and the Ministry of New and Renewable Energy (hereinafter ‘MNRE’) for the solar module to be listed under List-I, with notably, no foreign companies being on the list as of 2022. Further, the companies have to opt for the domestic Bureau of Indian Standards (hereinafter ‘BIS’) standard rather than the international standard for certification (ALMM Order Pt. 6). This causes a long bureaucratic delay in the certification of modules, which have to first get approved by the BIS and then by the MNRE. This de facto prevents foreign companies from trading as the elongated procedure is costly and time-consuming. Because of this, it falls as a protectionist measure under GATT (Article III) and doesn’t fall under the exceptions of environmental protection and conservation of resources under Article XX of the same.

ANALYSIS

The order, per the related procedure, prima facie appears to be a violation of Article III of GATT. While India may invoke GATT Article XX(b) (protection of human, animal, or plant life or health) and XX(g) (conservation of exhaustible natural resources) to justify the measure, its compliance with the substantive and procedural requirements of these exceptions is debatable. GATT Article XX provides general exceptions that allow WTO members to adopt measures inconsistent with GATT obligations if they meet specific criteria. Paragraphs (b) and (g) are particularly relevant for environmental policies. The author will analyse the order concerning these provisions and the chapeau, presenting arguments on why it’s violative of the same.

Under Article XX(b), a measure must be “necessary” to achieve its stated objective (See Also: Regan, 2007). The WTO Appellate Body has clarified that necessity involves assessing whether fewer trade-restrictive alternatives are available that achieve the same goal (Brazil-Retreaded Tyres, DS332). India may argue that the ALMM ensures high-quality solar modules to protect environmental health by promoting renewable energy adoption. However, this justification faces challenges. Firstly, India has not presented data demonstrating that BIS-certified modules materially contribute to environmental protection compared to internationally certified modules (e.g., IEC standards). In US-Gasoline (DS2), the Appellate Body emphasised the need for a direct link between the measure and its environmental objective. Secondly, international standards like the International Electrochemical Commission (hereinafter ‘IES’) certifications could ensure module quality without excluding foreign manufacturers. The ALMM’s dual certification requirement (BIS + MNRE) imposes redundant compliance burdens, failing the necessity test under Article XX(b).

Further, under Article XX(g), a measure must have a “close and real” relationship with resource conservation (US-Shrimp, DS58). Solar energy components could theoretically be linked to conserving non-renewable resources like fossil fuels by enabling renewable energy generation. The WTO Appellate Body has broadly interpreted “exhaustible resources” to include living resources and even clean air (US-Shrimp, DS58, pg 46 para 127). While solar energy itself is renewable, the author posits that India may argue that the promotion of domestic manufacturing reduces transportation emissions, indirectly conserving fossil fuels. Article XX(g) requires measures to apply equally to domestic and foreign products. The ALMM fails this test as no foreign manufacturers were listed as of 2025. The exclusionary impact mirrors India-Solar Cells (DS456), where domestic content requirements were deemed discriminatory under GATT. In US-Shrimp, the Appellate Body upheld turtle conservation measures but criticised their unilateral application without multilateral negotiations. Similarly, India’s ALMM lacks engagement with trading partners on harmonising standards.

Even if the ALMM satisfies paragraphs (b) or (g), it must comply with the chapeau of Article XX, which prohibits arbitrary or unjustifiable discrimination or disguised restrictions on trade. The ALMM was suspended in 2023–24 due to insufficient domestic capacity, allowing non-compliant modules temporarily. This inconsistency undermines claims of environmental necessity and suggests protectionist intent. In US-Shrimp, similar rigid enforcement was deemed arbitrary until the U.S. negotiated multilateral agreements. The exclusion of foreign manufacturers despite their ability to meet international standards indicates disguised protectionism rather than genuine environmental objectives. In EC-Asbestos (DS135), the Appellate Body stressed that measures must prioritise public health over economic interests. The ALMM’s focus on boosting domestic manufacturing fails this test.

RECOMMENDATIONS

To ensure that the ALMM Order aligns more closely with international trade obligations while still fulfilling its protective objectives, several recommendations can be made.

One of the primary criticisms of the order is its need for dual certification, mandating both BIS and MNRE approval. This requirement creates an unnecessary compliance burden, particularly for foreign manufacturers, as it does not recognise internationally accepted standards such as those set by the IEC. A key recommendation is to allow manufacturers to demonstrate compliance through either BIS or an internationally recognised certification standard.  Streamlining the approval processes is crucial. The existing dual approval requirement should be replaced with a single-window system that offers transparent timelines for approval. By publishing clear deadlines (e.g., 45 days for MNRE approval following BIS certification) and establishing an independent appeals mechanism for rejected applications, India can mitigate claims of unnecessary trade restrictiveness.  Moreover, aligning certification standards with globally accepted norms would ensure that the quality control measures serve a legitimate environmental-based purpose rather than functioning as a disguised trade restriction.

Further, the government should establish and publicly disclose measurable performance metrics that apply equally to both domestic and foreign solar module manufacturers. Data-driven justifications should accompany these benchmarks, providing empirical evidence that BIS-certified modules deliver superior environmental or health benefits compared to internationally certified alternatives. The absence of such data weakens India’s ability to invoke Article XX(b), as seen in WTO cases such as the US-Gasoline, where the necessity of a measure was scrutinised based on the availability of less trade-restrictive alternatives.

As demonstrated in cases such as the US-Shrimp, the lack of prior negotiation with trading partners was deemed an unjustifiable restriction. The ALMM Order, despite its potential environmental rationale, lacks sufficient consultation with international stakeholders to ensure that its quality standards align with global best practices. To strengthen the legitimacy of the measure, India could proactively engage in discussions with key trading partners, particularly countries with significant solar manufacturing industries, to explore opportunities for mutual recognition of standards. Establishing a dialogue on harmonising certification requirements would demonstrate a commitment to fair trade practices and could reduce the risk of retaliatory measures or formal disputes at the WTO.

Additionally, India should introduce a structured review process that reassesses the ALMM criteria at regular intervals. This would enable policymakers to refine the measure based on new technological developments, emerging data on solar module performance, and feedback from industry stakeholders.

CONCLUSION

The ALMM Order, while introduced to promote domestic solar manufacturing and ensure quality control, faces significant challenges under WTO jurisprudence. Its dual certification requirement, exclusion of foreign manufacturers, and lack of alignment with international standards suggest a protectionist intent rather than a genuine environmental objective. Under GATT Article XX, India’s justification for the measure on environmental grounds appears weak, as less trade-restrictive alternatives exist. The chapeau of Article XX further highlights the arbitrary and discriminatory nature of the order. To align with international trade obligations, India should streamline the approval process, accept internationally recognised certifications, and establish transparent, data-driven benchmarks.