China files WTO complaint against India over EV and battery subsidies

China has lodged a complaint with the World Trade Organisation (WTO), alleging that India’s subsidies for electric vehicles (EVs) and batteries breach global trade rules. India’s Commerce Ministry said it will review the submissions before responding.

China’s Commerce Ministry claimed the measures violate WTO obligations, including the principle of national treatment, and amount to prohibited import substitution subsidies that favour Indian manufacturers and hurt Chinese interests.

Commerce Secretary Rajesh Agrawal confirmed the ministry will examine the complaint. Officials said China has filed similar consultations against Turkey, Canada, and the European Union. Under WTO rules, such consultations are the first step in dispute resolution before a panel review.

China is India’s second-largest trading partner. In 2024–25, India’s exports to China fell 14.5% to USD 14.25 billion, while imports rose 11.5% to USD 113.45 billion, widening the trade deficit to USD 99.2 billion.

India offers several EV incentives to promote electric mobility. These include battery-linked subsidies under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME-II) scheme and the 2024 Scheme for Manufacturing of Electric Cars (SMEC) for new greenfield EV manufacturing facilities. Current subsidies include: Rs 15,000 per kWh for two-wheelers, Rs 10,000 per kWh for three- and four-wheelers, and Rs 20,000 per kWh for e-buses. Concessional import duties are granted to companies establishing new EV manufacturing facilities in India.

India’s EV policies aim to strengthen domestic manufacturing, accelerate adoption of electric mobility, and attract global investment in green vehicle production. Initiatives like FAME-II and SMEC are central to supporting this transition while ensuring India remains competitive in the global EV market.

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