NEW DELHI: China has filed a formal complaint against India at the World Trade Organization (WTO), alleging that New Delhi’s electric vehicle (EV) and battery subsidies give “an unfair competitive edge” to its domestic industries and undermine Beijing’s interests.
In a statement, China’s Ministry of Commerce said it would take “firm measures” to safeguard the legitimate rights of Chinese EV industry.
China’s move comes in the wake of reports of India’s plan to launch a National Critical Mineral Stockpile (NCMS) to ensure steady access to rare earth elements crucial for EV batteries, wind turbines, and other green technologies.
India’s NCMS aims to support domestic production and secure long-term mineral supplies at a time when China—the world’s largest supplier—has imposed export restrictions on several key elements.
In Delhi, Department of Commerce sources said they are looking into the detailed submissions made by China, adding that Beijing has lodged complaints against Turkey and Canada as well.
India has 30 days to hold consultations with China at the WTO to address the concerns outlined in the complaint. If talks fail to yield a mutually acceptable resolution, then Beijing may seek the formation of a dispute settlement panel to adjudicate its claims.
Over the few years, India has introduced several incentives for the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME-II) scheme. Last year, the government approved SMEC (Scheme for Manufacturing of Electric Cars) which offers concessional import duties to global automakers to set up EV plants in India.
Currently, China faces overcapacity with large production of EVs and slowing domestic sales, forcing Chinese players like BYD to look at overseas markets such as India to push their products. China’s own EV industry took off with massive government support and subsidies. Though direct subsidies ended, incentives and trade-in subsidies for buying new EV cars continue.
