China filed a formal complaint against India at the World Trade Organization (WTO), challenging New Delhi’s subsidies for electric vehicles (EVs) and batteries. The Chinese Ministry of Commerce asserts that India’s measures violate several WTO obligations, particularly the principle of national treatment, and constitute prohibited import substitution subsidies. These policies allegedly grant unfair competitive advantages to India’s domestic industries, undermining China’s legitimate economic interests.
The complaint follows China‘s broader strategy to address what it perceives as trade barriers in the global EV market. Chinese manufacturers, facing domestic overcapacity and declining profits, are increasingly targeting overseas markets, including India. However, India’s emphasis on local value addition, mandating 50% domestic content for production-linked incentives (PLI), has raised barriers for foreign entrants.
Under WTO rules, India has 30 days to respond and enter consultations. If no satisfactory solution is reached, China may request the establishment of a dispute panel. This development underscores the intensifying trade tensions between the two nations, particularly in the rapidly growing green technology sector.
India’s Commerce Secretary, Rajesh Agrawal, has stated that the government will examine China’s detailed submissions. This marks the first step in the WTO’s dispute settlement process, highlighting the significance of the issue in the broader context of international trade relations.