China vs India in WTO: India said – Our EV-battery policy is completely according to the rules, will fight strongly

New Delhi: India’s support measures to boost manufacturing in the automotive and renewable energy sectors are fully in line with World Trade Organization (WTO) standards and the country will strongly defend them in the proceedings before the WTO Dispute Settlement Committee. An officer said this. Following China’s request, the WTO’s dispute settlement body had announced on Tuesday the formation of a committee to hear the matter. The official said India regrets that China moved forward with the formation of the committee despite a good-faith and extensive bilateral consultation process on the matter, even though India had provided detailed clarifications and information on related measures during these consultations.

“India believes that China’s request for the formation of the committee reflects a misunderstanding of both the structure and implementation of these measures,” the official said. “India maintains that the measures challenged by China are fully consistent with WTO agreements and India’s rights and obligations, including the General Agreement on Tariffs and Trade, 1994 and the Agreement on Subsidies and Countervailing Measures.”

The official said the country would participate in the committee’s proceedings and “vigorously” defend its measures. It is confident that the Committee will find these measures consistent with WTO rules. In a complaint filed at the WTO in October 2025, China had alleged that certain conditions in India’s production-related incentive (PLI) scheme under its policy to promote manufacturing of advanced chemical cell batteries, motor vehicles and electric vehicles violate global trade rules as they discriminate against Chinese goods and exporters. China is a major exporter of these products.

According to WTO rules, a request for consultation is the first step in the dispute settlement process. If the consultation sought by the complainant does not yield a satisfactory solution, he may request the WTO to set up a committee to adjudicate on the issue. Both India and China are members of the World Trade Organization (WTO).

If a member country feels that a support measure given under any policy or scheme of another member country is causing harm to its exports of certain goods, it can file a complaint under the WTO dispute settlement mechanism. China is India’s second largest trading partner. India’s exports to China declined by 14.5 percent to US $ 14.25 billion in the financial year 2024-25 from US $ 16.66 billion in 2023-24.

However, imports increased by 11.52 per cent to US$ 113.45 billion in 2024-25 from US$ 101.73 billion in 2023-24. India’s trade deficit with China increased to US $ 99.2 billion during the financial year 2024-25.