Trade Tensions: China Challenges India's Auto and Energy Measures at WTO

China has filed a WTO dispute against India over policies in the automotive and renewable energy sectors. The complaint follows unsuccessful bilateral talks and accuses India of discriminatory trade practices. China cites India's PLI schemes as the main issues, seeking resolution through WTO intervention.

The World Trade Organisation's dispute settlement body has initiated a panel to address China's complaint against India concerning policies within the automotive and renewable energy sectors. On Tuesday, an official announced the panel's establishment after bilateral consultations failed to settle the disagreement.

Last year, China alleged India's Production Linked Incentive (PLI) schemes for advanced chemistry cell batteries and the promotion of electric vehicles violate trade norms by sidelining Chinese products. Efforts to reach a mutual agreement through dialogue in late 2025 and early 2026 did not yield results, leading China to pursue the next step of forming a panel as per WTO protocols.

China serves as India's second-largest trading partner, despite recent trade imbalance reports. In 2024-25, India's exports to China dropped by 14.5%, while imports rose. This has increased India's trade deficit with China to USD 99.2 billion, highlighting ongoing economic complexities between the two nations.