China Files WTO Complaint Against India Over EV Subsidies and Batteries

China has officially filed a complaint against India at the World Trade Organisation (WTO) over subsidies provided by New Delhi for electric vehicles (EVs) and batteries. The move comes as Chinese EV makers seek to expand their exports to India, tapping into the country’s rapidly growing green mobility market.

According to the Chinese Commerce Ministry, India’s measures violate multiple WTO obligations, including the principle of national treatment. Beijing claims that the subsidies act as import substitution incentives, which are explicitly prohibited under international trade rules. The ministry stated that these policies unfairly benefit domestic industries while undermining China’s legitimate commercial interests.

China’s filing coincides with its broader efforts to normalise ties with India after a five-year freeze following the Eastern Ladakh standoff. Facing declining domestic sales and overcapacity, major Chinese EV manufacturers such as BYD are looking to expand abroad, particularly in India, the EU, and Asia, as a way to offset domestic challenges and stiff price competition.

India’s Commerce Secretary Rajesh Agrawal confirmed that the ministry will carefully examine China’s detailed submissions. The dispute settlement process begins with consultations, allowing both countries to resolve issues bilaterally. If consultations fail, the complaining party can request the WTO to establish a panel to adjudicate the matter. China has also filed similar complaints against Turkey, Canada, and the EU over comparable subsidies.

Trade data underscores the stakes: India’s exports to China fell by 14.5% to USD 14.25 billion in 2024-25, while imports rose 11.52% to USD 113.45 billion, widening the trade deficit to USD 99.2 billion. Meanwhile, Chinese EV exports globally have surged, with over 2 million vehicles shipped in the first eight months of 2025, marking a 51% increase from the previous year. However, Chinese EVs are facing restrictions abroad, such as the 27% tariff imposed by the EU to limit sales.

India has implemented several measures to promote domestic EV manufacturing, including the electric vehicle policy and the production-linked incentive (PLI) scheme, aimed at boosting local production and infrastructure, particularly charging stations, which are critical to accelerating EV adoption.

The WTO dispute highlights the tension between promoting domestic industries and adhering to global trade rules. As negotiations unfold, India will need to balance its green mobility ambitions with compliance to international trade norms, while China seeks fair access for its EV exports.