China Challenges India’s EV and Auto Incentives at WTO

China Challenges India’s EV and Auto Incentives at WTO
China has raised a formal complaint at the World Trade Organization, challenging India’s Production‑Linked Incentive (PLI) schemes for electric vehicles, batteries, and automobiles. Beijing claims that these incentives unfairly favor domestic producers by linking benefits to local manufacturing, which it argues violates WTO rules on subsidies and national treatment. The specific schemes under scrutiny include India’s PLI programmes for advanced battery storage, the automobile and auto component sector, and electric passenger cars.
Under the WTO’s Subsidies and Countervailing Measures (SCM) Agreement, subsidies contingent on export performance or the use of domestic goods over imports are prohibited. Other subsidies may be considered “actionable” if they harm trade interests of other member countries. China contends that India’s PLIs provide an undue advantage to local firms over foreign competitors, potentially breaching these rules. The dispute highlights the tension between India’s strategy to boost domestic manufacturing and its obligations under global trade frameworks.