There is no immediate concern for India after China challenged at the World Trade Organization (WTO) India’s policy measures aimed at promoting domestic manufacturing in the electric vehicles and renewable energy sectors, experts said. Due to the absence of a functional appellate body at the WTO, the case is unlikely to move forward anytime soon, making Beijing’s move just a symbolic gesture, according to them. Experts also hinted that the issue might get dragged on for 4-5 years without any further development.
“The WTO appellate body [is] completely non-functional, [so] the dispute process is all by way of a symbolic gesture or a token. By way of tokenism that you file a complaint, then there are consultations, it doesn't yield any results and then it goes to the panel stage and the panel gives a ruling. There could be two outcomes -- India wins the case or China’s complaint is upheld. If China wins, India will file an appeal at the WTO. And because there is no appellate body, it will be filed into the void,” explains Jayant Dasgupta, former Indian ambassador to the WTO.
Last week, China filed a formal complaint against India, alleging that New Delhi’s electric vehicle (EV) and battery subsidies give “an unfair competitive edge” to domestic industries and undermine Beijing’s interests. Under WTO procedures, India has 30 days from the filing date to hold consultations with China to address its concerns. If these talks fail, Beijing can seek the formation of a dispute settlement panel to adjudicate the matter.
“So, the appeal will be kept pending and till the appeal is kept pending, there is no finality to a dispute. Till such time as the appeal is disposed off against India, China can't retaliate according to the WTO,” said Dasgupta.
He estimated that the entire process would take no less than four to five years, if the appellate body is revived with immediate effect.
Experts asserted that China itself has been a heavy subsidizer, and not only does it provide subsidies at the federal level but also at the city level.
India could also gain a timing advantage. A former bureaucrat, who doesn't wish to be named, highlighted that the Production Linked Incentive (PLI) scheme for EVs, runs from FY23 to FY27, with incentives disbursed until FY28. By the time the WTO process concludes, the scheme would likely have ended.
Commerce Secretary Rajesh Agrawal said that the ministry will look at the detailed submissions made by China. Department of Commerce sources said that Beijing has lodged complaints against Turkey and Canada as well. However, a Ministry official said that China has sought consultations with India in this regard too.
