China Files WTO Complaint Against India on EV Battery Subsidy Policies

China has formally raised a dispute with the World Trade Organisation (WTO) against India’s electric vehicle (EV) and battery subsidy schemes, alleging these measures violate global trade rules and favour Indian industries at China's expense.

China Challenges India’s EV Subsidy Structure at WTO

On October 15, 2025, China filed a formal complaint with the WTO, asserting that India’s current subsidy policies for EVs and battery manufacturing unfairly benefit domestic players while limiting foreign competition. 

China’s Ministry of Commerce stated that these measures harm the legitimate rights and economic interests of Chinese enterprises, urging New Delhi to take immediate corrective action.

Accusations of Protectionist Measures

According to China’s complaint, India’s subsidy frameworks include financial incentives and local sourcing mandates that are discriminatory in nature. These are seen as potentially breaching WTO agreements related to trade-related investment measures and subsidies. China has demanded that India align its policies with WTO standards and eliminate barriers that hinder international competition.

India’s EV Push under the Spotlight

India has aggressively promoted EV adoption via significant incentives in programmes such as FAME (Faster Adoption and Manufacturing of Electric Vehicles), offering subsidies to encourage local production of EVs and associated battery technologies. These schemes are aimed at reducing carbon emissions and increasing energy security through domestic manufacturing initiatives.

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Potential Implications for Bilateral Trade

The complaint adds to the list of ongoing trade tensions between India and China. With both countries being major players in the global EV sector, this dispute could impact existing supply chains and trade dynamics, particularly if retaliatory measures or policy changes follow. The WTO will now engage both parties in consultation, which could extend over several months before reaching a resolution.

Conclusion

China’s WTO complaint spotlights the growing global scrutiny of national-level subsidy policies in strategic sectors like EVs and batteries. The eventual outcome of this dispute will be crucial in determining the framework within which developing economies like India can continue to support domestic innovation while adhering to global trade norms.

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