China Accuses India of Unfair EV Subsidies at Global Trade Body

China has officially lodged a complaint with the World Trade Organization (WTO) against India, alleging that its electric vehicle (EV) and battery subsidy programs unfairly favor domestic manufacturers and violate global trade rules.

Key Allegations from China

Violation of WTO principles: China claims India’s subsidies breach the principle of national treatment and constitute import substitution subsidies, which are explicitly prohibited under WTO rules.

Discrimination against imports: The complaint highlights that India’s Production Linked Incentive (PLI) schemes for EVs and advanced chemistry cell (ACC) batteries are contingent on the use of domestic goods, thereby disadvantaging foreign products—especially Chinese exports.

Schemes under scrutiny:

• ₹18,100 crore National Programme on ACC Battery Storage. 
• ₹25,938 crore PLI Scheme for Automobile and Auto Components. 
• Additional schemes promoting domestic EV manufacturing

India’s Position (Implied)

India offers some of the world’s highest subsidies on electric cars. For example, the Tata Nexon EV reportedly receives subsidies amounting to nearly 46% of its price, including reduced GST and other incentives.

What Happens Next?

China has requested consultations under the WTO’s dispute settlement mechanism—a formal first step in resolving trade disputes. If unresolved, the case could escalate to a WTO panel and potentially lead to retaliatory measures or mandated policy changes.