China WTO complaint against India over EV and battery subsidy schemes, alleging unfair trade practices and WTO violations. Dispute targets PLI and E-Drive programs.
New Delhi | October 22, 2025 | The Interview Times— China has formally filed a WTO complaint against India, challenging the country’s electric vehicle (EV) and battery subsidy schemes. The China WTO Complaint Against India accuses New Delhi of breaching international trade obligations by favoring domestic manufacturers through local content requirements and import restrictions.
China WTO Complaint Against India: What Triggered the Dispute
According to the World Trade Organization (WTO) notification (WT/DS626/1), Beijing lodged the complaint on October 15, 2025, targeting three major Indian programs — the Production-Linked Incentive (PLI) Scheme, the PM E-Drive Scheme, and the Scheme for Manufacturing of Electric Cars (SMEC).
China claims these programs discriminate against foreign EV producers and violate Articles 3.1(b) and 3.2 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The complaint specifically objects to India’s domestic value addition clause, calling it a violation of fair trade principles under the China WTO Complaint Against India case.
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Subsidies Under Scrutiny: PLI, E-Drive, and SMEC
The China WTO Complaint Against India focuses on three subsidy programs:
- PLI Scheme for Auto and Auto Components (₹25,938 crore) – Offers incentives up to 18% on incremental sales for five years to companies meeting domestic value addition targets. Eleven companies, including Tata Motors, Ola Electric, and Hyundai, are certified under this scheme.
- PM E-Drive Scheme (₹10,900 crore) – Provides incentives between ₹10,000 and ₹15,000 per kWh for EV batteries and covers 80% of charging infrastructure costs.
- SMEC Scheme (Approved March 2024) – Allows a reduced customs duty of 15% (from 70–100%) on imported EVs for five years, contingent upon ₹4,150 crore investment and 50% local value addition within five years.
These measures, according to the China WTO Complaint Against India, create “unfair competitive advantages” for Indian firms.
Official Reactions from India and China
A spokesperson for India’s Ministry of Commerce and Industry confirmed receipt of the WTO notice.
“India remains committed to its WTO obligations and will engage constructively in the consultation process,” the ministry said.
Meanwhile, the Chinese Ministry of Commerce called on India to “correct these wrongful practices” to ensure fairness in the global EV supply chain.
The China WTO Complaint Against India represents a growing friction between Asia’s two largest economies over trade policy and industrial incentives.
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Trade Context: India-China Economic Tensions
India’s trade deficit with China reached $85.07 billion in FY 2024–25, according to DGCI&S data. Despite this imbalance, EV imports from China remain negligible due to India’s high tariffs and regulatory restrictions.
India’s EV market penetration was 2.3% of total vehicle sales in 2024, compared to over 25% in China, according to the Society of Indian Automobile Manufacturers (SIAM).
The China WTO Complaint Against India underscores the contrast between India’s nascent EV market and China’s globally dominant position.
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Global Pattern: China Challenges EV Subsidies Worldwide
The China WTO Complaint Against India is part of a broader pattern of trade challenges. In 2025 alone, China filed similar WTO cases against:
- Turkey (WT/DS625/1, September 2025)
- Canada (WT/DS624/1, August 2025)
- European Union (Ongoing since 2024)
These cases collectively signal China’s coordinated campaign against localization-linked EV incentives worldwide.
Next Steps in the WTO Process
The WTO consultations between China and India are scheduled within 60 days from October 15, 2025. If no resolution is reached, a WTO dispute panel may be established by early 2026.
India’s position, as stated by officials, is that all its incentive schemes comply with WTO rules and aim to promote sustainable manufacturing and green mobility.
Conclusion
The China WTO Complaint Against India highlights the growing tension between industrial policy and global trade compliance. As both countries push for dominance in the EV sector, the WTO’s decision could redefine how nations balance domestic growth incentives with international trade norms.