EV Subsidy War Heats Up as China Files WTO Complaint Against India

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China’s Commerce Ministry has officially urged India to rectify what it terms as 'wrongdoings' regarding electric vehicle (EV) and battery subsidies. Simultaneously, China has filed a complaint with the World Trade Organization (WTO), intensifying trade tensions centered on policies China alleges discriminate against its EV industry and distort fair competition.

China's Commerce Ministry has taken a firm stance urging India to correct subsidy practices related to electric vehicle batteries that Beijing deems unfair. This follows China's formal complaint to the WTO against India's financial support schemes for EV and battery manufacturers, which China argues violate WTO regulations by favoring domestic producers and excluding Chinese exports.

The ministry's statement reflects rising tensions as China asserts India’s subsidy policies constitute “wrongdoings” that undermine legitimate Chinese investors’ and businesses’ interests. The move to escalate the matter at the WTO underscores the complexity and global significance of trade barriers within the rapidly expanding EV market.

Urging Correction and Dialogue

China’s Commerce Ministry called on India to immediately correct its subsidy policies, emphasizing the need for dialogue to resolve the dispute. China insists that the ongoing subsidy policies disrupt fair competition and violate international trade rules.

The ministry advocated working through established WTO mechanisms and bilateral consultations to properly manage differences and promote sustainable economic relations.

WTO Complaint on EV and Battery Subsidies

China lodged a formal complaint with the WTO targeting India’s subsidies for electric vehicles and battery manufacturing, arguing these financial incentives disproportionately exclude Chinese-made products, skewing markets.

The complaint alleges these subsidies act as non-tariff barriers, impeding Chinese companies' access to the Indian EV market and contravening WTO agreements on subsidies and countervailing measures.

Trade Tensions in the EV Industry

The dispute reflects broader geopolitical and trade frictions in the global EV sector, where India and China both seek dominance in emerging clean energy technologies.

China’s move follows similar complaints it has made against the United States concerning EV subsidies, signaling a pattern of aggressive legal use of WTO frameworks by China to challenge protectionist industrial policies by major economies.

This development places additional pressure on India as it pushes to expand its domestic EV industry through government incentives, even as it faces rising scrutiny from international trade partners and regulators.

Sources: China Ministry of Commerce, World Trade Organization, Xinhua, Reuters, CGTN Global Business, Times of India

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