In a move set to intensify trade tensions, China has formally lodged a complaint against India at the World Trade Organization (WTO) over India’s subsidy programs for electric vehicles (EVs) and batteries, alleging they violate global trade rules.
China has initiated the first step of a formal dispute against India at the World Trade Organization (WTO), requesting consultations over New Delhi's policies aimed at boosting domestic manufacturing of Electric Vehicles (EVs) and batteries. The complaint, confirmed by officials in both nations, centres on flagship initiatives like the Production-Linked Incentive (PLI) scheme and dedicated EV policies, which China alleges violate WTO obligations, including the principle of 'national treatment' and constitute prohibited 'import substitution subsidies.'
The Ministry of Commerce in Beijing claims that these measures "unfairly benefit India's domestic industries" by granting them a competitive advantage and "undermine China's legitimate interests" in global trade. This challenge arrives as Chinese EV manufacturers, facing overcapacity and intense domestic price wars, are actively seeking to expand their presence in fast-growing overseas markets, with India's burgeoning EV sector being a key target. The move mirrors similar actions taken by China against other economies, including Turkiye, Canada, and the European Union, over their respective green technology incentive programs.
India's Commerce Secretary, Rajesh Agrawal, confirmed the development, stating that the ministry would meticulously "look at the detailed submissions made by China" before formulating the government’s response.
Seeking consultation is the mandatory first stage in the WTO’s dispute settlement mechanism. Under the rules, if bilateral consultations fail to resolve the issue within 60 days, the complaining member—in this case, China—is entitled to request the WTO to establish a dispute settlement panel to adjudicate the claims.
The trade context between the two Asian giants adds a layer of complexity to the dispute. China remains India’s second-largest trading partner, but the relationship is marked by a persistently and rapidly growing trade imbalance.
The complaint comes at a sensitive time, following tentative efforts by both nations to normalise diplomatic and trade relations after a prolonged freeze triggered by the Eastern Ladakh military standoff. India's aggressive push for domestic value addition in the EV and battery supply chain is seen as a strategic imperative to reduce import dependence, particularly on China for critical components, and to foster 'Made in India' champions in a globally significant future industry.
