On October 15, 2025, China formally filed a complaint with the World Trade Organization (WTO) against India, citing its electric vehicle (EV) and battery subsidies. China claims these subsidies grant Indian manufacturers an unfair competitive advantage, harming China’s industry and violating trade norms.
What Exactly China Alleges
- India has offered subsidies for EVs and battery production that skew competition in favor of domestic producers.
- These measures, says China’s Commerce Ministry, damage Chinese economic interests by erecting barriers to fair trade.
- China has urged New Delhi to “rectify wrongdoings”, hinting at diplomatic pressure and possible reprisals if the WTO complaint proceeds unfavorably.
What We Know About India’s Subsidies
India has been offering incentives in its EV & battery policy schemes to encourage local manufacturing and reduce imports. These often include:
- Capital subsidies and production linked incentives for EV and battery makers
- Preferential treatment (tax breaks, cheap power, land allotments, etc.) for domestic battery and EV plants
- Mandates or incentive schemes that favor locally produced components over imported ones
While China has not (in the publicly reported sources so far) specified which exact subsidy measures are being challenged, the complaint implies India’s policy framework in the EV sector is the issue.
Legal / WTO Context
- Under WTO rules, subsidies are regulated – certain forms are prohibited, others are allowed but with constraints (e.g. must not distort trade unduly). China is effectively asking the WTO to evaluate whether India’s policies cross that line. mint
- China may demand consultations first (which is standard), and if no resolution, an expert panel or dispute settlement process could follow.
Implications
For India
- India may have to defend its subsidy schemes at WTO, which could mean adjusting policies if found in violation or facing trade reprisals.
- Alternatively, India might argue that its policies are consistent with WTO exceptions (for environmental / green tech / industrial development).
For China
- China seeks to protect its EV / battery manufacturers from being undercut by Indian subsidies.
- Might push for changes or compensations if the WTO rules in its favour.
For the Global EV / Green Tech Sector
- This dispute is another example of rising trade friction in green technology spaces. As governments offer big subsidies and incentives, conflicts over what is “fair” are increasing.
- Could lead to clearer WTO precedents on what kinds of EV / battery subsidies are allowable, especially in the context of climate / green industrial policy.
What Happens Next
- Consultation phase: China will likely request formal consultations with India through the WTO.
- If no agreement, India might face an expert panel to adjudicate the matter.
- Depending on the outcome, India may need to either adjust subsidy frameworks or accept countermeasures.
- Observers will watch how this shapes future EV subsidy policies globally: governments will want to avoid WTO conflict.
