China has formally filed a complaint with the World Trade Organisation (WTO) against India, alleging that its electric vehicle (EV) and battery manufacturing subsidies unfairly benefit domestic producers.
Beijing argues that India’s incentives, including tax breaks and production-linked rewards, create an uneven playing field for Chinese automakers seeking access to the Indian market.
Under WTO rules, India has 30 days to respond and enter consultations; failure to do so could lead China to request the formation of a dispute panel.
China, a major subsidizer of its own EV industry, is facing overcapacity as domestic demand slows. Analysts project that only 15 of 129 Chinese EV brands may survive by 2030, prompting firms like BYD to explore international markets such as India.
India’s policies, which require 50% domestic content for eligibility under the production-linked incentive (PLI) scheme, have raised barriers for foreign entrants.
India’s EV policy framework aims to develop a self-reliant and competitive domestic industry.
Key programs include the FAME India Scheme (Phase I and II), which has supported over 16.29 lakh EVs by June 2025, and the ₹25,938 crore PLI Scheme for Advanced Automotive Technologies, which has already attracted over ₹29,500 crore in investments.
The PLI scheme for ACC batteries targets 50 GWh of local production, with 40 GWh already allocated.
Additional initiatives such as PM E-DRIVE (₹10,900 crore) and SPMEPCI provide consumer subsidies and encourage localization, while the PM-eBus Sewa scheme aims to deploy 10,000 electric buses through public-private partnership models.
India is also planning a National Critical Mineral Stockpile to reduce dependence on imports, particularly from China, amid tightening global supply chains.
China’s WTO complaint highlights growing tensions over EV trade and localization policies, setting the stage for a potential legal dispute that could influence the global EV market and investment flows.
POLICY & LAW | SA Signs New Trade Deal for Stone Fruit Exports to China
