India’s EV Subsidy Makes China Nervous – Files Complaint In World Trade Organisation
China has filed a complaint against India at the World Trade Organisation (WTO), claiming that some of India’s subsidy schemes for electric vehicles and batteries break global trade rules. Beijing says that India’s Production Linked Incentive (PLI) schemes for advanced chemistry cell (ACC) batteries, automobiles, and EV manufacturing unfairly favour local products over imported ones. It also says that these policies discriminate against Chinese goods.
According to the WTO’s communication dated October 20, China has asked for consultations with India under the WTO’s dispute settlement system; the first step in resolving such issues. If both countries fail to reach an agreement, China can ask for a WTO panel to review the case.
China’s complaint names three specific Indian programmes:
- The National Programme on Advanced Chemistry Cell (ACC) Battery Storage
- The PLI Scheme for Automobile and Auto Component Industry
- The Scheme to Promote Manufacturing of Electric Passenger Cars in India
China argues that these measures go against India’s obligations under international trade agreements such as the SCM (Subsidies and Countervailing Measures) Agreement, the GATT 1994, and the TRIMs (Trade-Related Investment Measures) Agreement.
The complaint comes at a time when China is trying to expand its electric vehicle exports, including to India, amid slowing domestic sales and overproduction. Chinese EV makers are also facing new challenges abroad, such as the European Union’s recent 27% tariff on Chinese electric cars.
India, on the other hand, has been pushing to grow its own EV industry through PLI schemes. The government approved the Rs 18,100 crore ACC battery scheme in 2021 to boost local cell production and cut import dependence. It also introduced a Rs 25,938 crore PLI scheme for automobile and auto component manufacturing to support advanced automotive technology production and create jobs. In 2024-25, India’s trade deficit with China widened to USD 99.2 billion, as imports grew while exports fell.
(With inputs from PTI)
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