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.

Solar Startups In India To Suffer Setback As WTO Ruled Against India's Solar Program

In what could be seen as a major disappointment for India, the World Trade Organisation (WTO) in one of its recent ruling crushed the country's dream to successfully create homegrown solar energy. This ruling by WTO is an apt example of how archaic trade rules are completely out of sync with the current global challenges being faced by the world to make a 100 % transition to clean energy.

India's National Solar mission has played a pivotal role in helping the country make a transition from a country with virtually no solar energy capacity to housing one of the fastest growing solar industry in the whole wide world, that too in just a short period of five years. It was just last year in 2015 that the country had a number of top big names in the solar energy world making announcements of their plans to set up their new factories in the country in order to produce solar cells. In fact, India has specifically mentioned its solar program as one of its main contribution to the Paris agreement to tackle the current situation of global climate change.

Related Reading - Solar Startups in India is booming like never before (2013)

But, unfortunately, WTO has recently ruled against India's National Solar Mission on the grounds that the developing country's steps to boost the local production of solar cells has violated the organisation's rules. Though India decided to fight back and defended its stance on the basis that the program helps India to fulfil its climate commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the WTO decided to reject the country's argument completely.

In just five years of its announcement, India's national solar program has been able to make a significant impact. Under it, the country has been able to increase its solar capacity from nearly a nothing point to commissioning about five thousand megawatts, all thanks to government's efforts in the form of long-term contracts and subsidies. This solar expansion has come at the right time for India, as the country's Indian coal industry has been having a tough time trying to meet the power demand of the current population. With the program, India's aim was to reduce the cost involved in setting up equipments for solar energy production and reach the 100,000 megawatts of solar power capacity mark by the year 2022.

But, in a sad turn of events, the US government registered a WTO case against India's National Solar program in the year 2014. According to them, the "buy-local" rules of the first phases of the program, which clearly state that the power companies need to make use of the solar components made in India in order to take benefits from the government-subsidized program, discriminated against the United States solar exports. WTO in its ruling decided that the country's buy-local rules does "accord less favorable treatment" to the imported solar components, even while stating the fact that "imported cells and modules currently have a dominant share of the market for solar cells and modules in India."

In an effort to persuade the United States to drop its WTO case against the country, India has indicated that it might just be ready to make some changes in its much ambitious national solar program. But, whether the U.S. will accept the changes and withdraw the case is something which can't be predicted. The one thing that can be predicted for sure is that the flourishing solar startup market in the country is for sure going to suffer great losses and setback because in the five years since the launch of the National solar program, the market has come a long way due to the urgent need for an alternative energy and great government support for the same. The fate of these Indian solar startups doesn’t look so promising.

Solar Startups In India To Suffer Setback As WTO Ruled Against India's Solar Program

In what could be seen as a major disappointment for India, the World Trade Organisation (WTO) in one of its recent ruling crushed the country's dream to successfully create homegrown solar energy. This ruling by WTO is an apt example of how archaic trade rules are completely out of sync with the current global challenges being faced by the world to make a 100 % transition to clean energy.

India's National Solar mission has played a pivotal role in helping the country make a transition from a country with virtually no solar energy capacity to housing one of the fastest growing solar industry in the whole wide world, that too in just a short period of five years. It was just last year in 2015 that the country had a number of top big names in the solar energy world making announcements of their plans to set up their new factories in the country in order to produce solar cells. In fact, India has specifically mentioned its solar program as one of its main contribution to the Paris agreement to tackle the current situation of global climate change.

Related Reading - Solar Startups in India is booming like never before (2013)

But, unfortunately, WTO has recently ruled against India's National Solar Mission on the grounds that the developing country's steps to boost the local production of solar cells has violated the organisation's rules. Though India decided to fight back and defended its stance on the basis that the program helps India to fulfil its climate commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the WTO decided to reject the country's argument completely.

In just five years of its announcement, India's national solar program has been able to make a significant impact. Under it, the country has been able to increase its solar capacity from nearly a nothing point to commissioning about five thousand megawatts, all thanks to government's efforts in the form of long-term contracts and subsidies. This solar expansion has come at the right time for India, as the country's Indian coal industry has been having a tough time trying to meet the power demand of the current population. With the program, India's aim was to reduce the cost involved in setting up equipments for solar energy production and reach the 100,000 megawatts of solar power capacity mark by the year 2022.

But, in a sad turn of events, the US government registered a WTO case against India's National Solar program in the year 2014. According to them, the "buy-local" rules of the first phases of the program, which clearly state that the power companies need to make use of the solar components made in India in order to take benefits from the government-subsidized program, discriminated against the United States solar exports. WTO in its ruling decided that the country's buy-local rules does "accord less favorable treatment" to the imported solar components, even while stating the fact that "imported cells and modules currently have a dominant share of the market for solar cells and modules in India."

In an effort to persuade the United States to drop its WTO case against the country, India has indicated that it might just be ready to make some changes in its much ambitious national solar program. But, whether the U.S. will accept the changes and withdraw the case is something which can't be predicted. The one thing that can be predicted for sure is that the flourishing solar startup market in the country is for sure going to suffer great losses and setback because in the five years since the launch of the National solar program, the market has come a long way due to the urgent need for an alternative energy and great government support for the same. The fate of these Indian solar startups doesn’t look so promising.