Trade tensions between India and China have intensified after China moved the World Trade Organization (WTO) over India’s incentive schemes linked to electric vehicles and battery manufacturing.
Beijing has raised concerns that India’s policies unfairly support local production while restricting imported goods, especially from China.
After bilateral discussions failed to resolve the issue, China has now sought WTO intervention. The matter is expected to be taken up at the WTO’s Dispute Settlement Body meeting in Geneva later this month, making it a key development in global clean-mobility trade dynamics.
What China Is Objecting To?
China’s complaint targets India’s Production Linked Incentive (PLI) schemes for advanced battery cells, automobiles and electric passenger vehicles. According to Beijing, these programmes include local sourcing conditions that favour Indian manufacturers over foreign suppliers. China claims such rules go against WTO commitments related to fair trade, subsidies and investment measures.
Why the WTO Has Been Involved?
As per WTO rules, disputes must first go through consultations. Since talks held between India and China in recent months did not lead to a resolution, China has now requested the formation of a WTO panel to review the matter. If approved, the panel will examine whether India’s policies violate international trade norms.
Impact on India’s EV Push
India’s incentive schemes are a key part of its plan to build a strong domestic EV and battery manufacturing ecosystem, reduce dependence on imports and attract global investment. China, being a dominant player in global EV and battery supply chains, views these policies as limiting market access.
What Lies Ahead?
India is yet to issue an official response to the WTO request. If the dispute proceeds, it could take several months to conclude and may have broader implications for India’s clean-energy strategy and future trade negotiations.
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