China Challenges India’s EV Subsidies At World Trade Organisation

China has formally lodged a complaint with the World Trade Organisation (WTO) against India, alleging that its electric vehicle (EV) and battery manufacturing subsidies unfairly favour domestic producers. 

Beijing claims these incentives, including tax breaks and production-linked rewards, create an uneven playing field for Chinese automakers seeking to enter the Indian market. Under WTO rules, India has 30 days to respond and enter consultations, failing which China may seek a dispute panel.  

China’s Export Ambitions

China, despite being a major subsidiser of its own EV sector, now faces overcapacity as domestic demand slows. With only 15 of 129 Chinese EV brands expected to survive by 2030, firms like BYD are eyeing markets like India. 

However, India’s emphasis on local value addition, mandating 50% domestic content for PLI benefits, has raised barriers for foreign entrants.  

India’s Push for Domestic EV Manufacturing

India’s policy framework aims to build a self-reliant EV ecosystem. Key initiatives include the FAME India Scheme (Phase I and II), supporting over 16.29 lakh EVs by June 2025, and the ₹25,938 crore PLI Scheme for Advanced Automotive Technologies, which has attracted over ₹29,500 crore in investments. 

The PLI for ACC batteries targets 50 GWh of local production, with 40 GWh already awarded.   

Programmes like PM E-DRIVE (₹10,900 crore) and SPMEPCI are accelerating adoption, offering consumer subsidies and encouraging localisation. The PM-eBus Sewa scheme aims to deploy 10,000 e-buses via PPP models. 

Meanwhile, India plans a National Critical Mineral Stockpile to reduce dependency on imports, especially from China, amid tightening global supply chains.  

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