China Files WTO Complaint Against India Over EV Subsidies

Beijing/New Delhi, Oct 15 (PTI) China has filed a complaint against India in the World Trade Organization (WTO) over New Delhi's subsidies for electric vehicles (EVs) and batteries.

The Chinese Commerce Ministry has alleged that the measures by India violate several WTO obligations, including the principle of national treatment, and constitute import substitution subsidies, which are explicitly prohibited under the multi-lateral trade rules.

These measures unfairly benefit India's domestic industries and undermine China's legitimate interests, the ministry's statement claimed.

China's complaint about India's reported EV subsidies comes as Beijing seeks to boost exports of its electric vehicles to India. This follows the two countries' initiative to normalise relations after a five-year freeze in ties due to the Eastern Ladakh military standoff.

Considering the size and scope of India's auto market, Chinese EV automakers see it as a major source to expand sales.

According to recent reports, facing overcapacity with large production of EVs and declining domestic sales and profits amid price wars, Chinese hybrid car makers like BYD are looking for overseas markets, especially in the EU and Asia.

When asked about the issue, Commerce Secretary Rajesh Agrawal said that the ministry will look at the detailed submissions made by China.

An official said that China has also filed similar applications against Turkiye, Canada and the EU.

"They have sought consultations with India," the official said.

Seeking consultation is the first step of the dispute settlement process as per WTO rules.

If the consultations requested with India do not result in a satisfactory solution, the EU can request that the WTO set up a panel in the case to rule on the issue raised.

China is the second-largest trading partner of India.

In the last fiscal, India's exports to China contracted 14.5 per cent to USD 14.25 billion against USD 16.66 billion in 2023-24.

The imports, however, rose by 11.52 per cent in 2024-25 to USD 113.45 billion against USD 101.73 billion in 2023-24.

India's trade deficit with China has widened to USD 99.2 billion during 2024-25.

According to the data from China Passenger Car Association (CPCA), 50-odd EV builders of China exported a total of 2.01 million pure electric and plug-in hybrid vehicles overseas in the first eight months of the year, up 51 per cent from the same period a year earlier.

But the Chinese EV makers are facing push back abroad as EU has imposed a 27 per cent tariff on Chinese EVs to limit their sales in the bloc.

The Indian government has taken a host of measures, such as the electric-vehicle policy and the production-linked incentive scheme, to boost domestic manufacturing of EVs.