Genuine question: how are these benefits ok under, say WTO rules, which prohibit discrimination? The WTO ruled that the Indian govt cannot subside domestic solar panel manufacturers, since it discriminates against US manufacturers (who filed the suit). Now, Nissan isn't a UK company but doesn't it mean that cars made in that plant have an unfair edge against, say, cars made in Germany or even China and then imported into the UK?
Nobody really knows what the british government promised. These kind of deal are usually not addressed in the context of the WTO/GATT. So the short answer is, that GATT/WTO just covers certain areas/cases.
In the case of India the issue is about “domestic content requirements” (DCR measures). India wants to tell the companies, that they have to buy domestic solar panels and not those that are produced by foreign companies. That is generally seen as illegal (Gatt III:4 + TRIM 2.1), but there are a lot of exemptions from this rule. India wanted to claim an exemption based on III:8(a) or Gatt XX(d)(j).
- III:8 (a) doesn’t apply because the solar cells are not the good that the government is actually buying (which is energy) and energy is not in a “competitive relationship” with the solar cells, that these rules discriminate against. It is a bit of a legal argument, so don’t pay too much attention to it, but India is quite clearly stretching the law.
- XX (d) doesn’t apply because the climate acts/conventions/agreements, that determine the goal, don’t constitute laws/rules according to the definition in this article.
- XX (j) doesn’t apply because there is no supply shortage.
There was also another case between Japan/EU vs Canada where a similar ruling happened. So the outcome of this ruling is hardly a surprise.
I am fairly sure that India will find other – legal – ways to support this industry. The trade rules are a bit dodgy and to some extend arbitrary and by no means comprehensive. I havn’t read the newest commentary yet, so I am not really up to date.
My final remark would be, that the EU-internal laws against distortion of competition are a lot stricter, but even they have more loop-holes than cheese. Sometimes it is hard to understand why certain things are allowed, while others are not without understanding the history of certain laws/agreements.