China Initiates WTO Dispute Against India Over Solar and IT Sector Restrictions

China has initiated a trade dispute against India at the World Trade Organization (WTO) over measures affecting solar cells, solar modules and selected information technology (IT) products, as per news reports.  

The WTO said China has sought consultations with India under its dispute settlement mechanism, which is the first formal step in such cases. 

Issues Flagged by China 

In its submission, China has objected to India’s tariff and import duty treatment for certain technology products. It has also raised concerns about measures that it says favour the use of domestic inputs over imported goods, arguing that these conditions disadvantage Chinese exports. 

China has stated that these measures affect trade in sectors where Chinese manufacturers have a strong global presence, particularly solar equipment and IT hardware. 

Focus on Incentive-Linked Conditions 

China’s complaint includes India’s support measures for domestic manufacturing under the Production Linked Incentive (PLI) framework. Specific reference has been made to the National Programme on High Efficiency Solar PV Modules. 

China has pointed out that incentives under the programme are subject to eligibility criteria, including minimum local value addition requirements. It has argued that such conditions limit the use of imported components and alter competitive conditions for foreign suppliers. 

WTO Rules Referenced 

China has said the measures may breach obligations under multiple WTO agreements. These include the General Agreement on Tariffs and Trade (GATT) 1994, the Agreement on Subsidies and Countervailing Measures, and the Agreement on Trade-Related Investment Measures. 

Under WTO rules, consultations allow the two sides to seek a negotiated solution. If these discussions fail, China can request the formation of a dispute settlement panel to examine the matter and issue findings. 

Background of Recent Trade Actions 

The dispute follows India’s decision, less than a week earlier, to impose anti-dumping duties on cold rolled steel imports from China for a period of five years. India said the measure was aimed at protecting its domestic steel industry. 

China is India’s second-largest trading partner, though trade flows remain uneven. 

Bilateral Trade Figures 

During the 2024-25 financial year, India’s exports to China fell by 14.5% to $14.25 billion, compared with $16.66 billion in the previous year.  

Imports from China increased by 11.52% to $113.45 billion from $101.73 billion. India’s trade deficit with China widened to $99.2 billion. 

Read More: Indian Economy Sees Faster Growth in Q2 FY26, RBI Bulletin Shows! 

Conclusion 

China’s move places India’s solar and IT-related measures under formal WTO scrutiny, with the next steps dependent on the outcome of bilateral consultations. 

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