Document: WT/DS642/1 — Request for Consultations by China (20
October 2025)
China has formally
initiated a WTO dispute
(DS642) against India, alleging that several Indian industrial
incentive schemes violate global trade rules by favoring domestic over imported
goods. The complaint targets three major programs:
1.
PLI
ACC Battery Scheme (2021):
Incentivizes domestic manufacturing of advanced chemistry cell (ACC) batteries
with requirements for up to 60%
domestic value addition within five years.
2.
PLI
Auto Scheme (2021):
Provides sales-linked incentives to automakers and component producers for
“advanced automotive technology” products achieving at least 50% domestic content.
3.
EV
Passenger Cars Scheme (2024):
Allows reduced 15% import
duty on electric car imports, conditional on establishing local
manufacturing and meeting 25%–50%
local value addition targets.
China argues these
measures discriminate against imported goods and violate India’s obligations
under:
·
SCM
Agreement
(Articles 3.1(b), 3.2) — prohibited subsidies contingent on using domestic
goods;
·
GATT
1994
(Articles III:4 and I:1) — violation of national treatment and
most-favored-nation (MFN) principles;
·
TRIMs
Agreement
(Article 2.1) — local content requirements inconsistent with GATT.
China also claims the
measures nullify or impair benefits owed to it under WTO rules.
The consultation
request marks the first formal challenge to India’s Production Linked Incentive (PLI)
framework, a key policy of its “Make in India” strategy to boost domestic
manufacturing in high-tech and green sectors.
China
has requested WTO dispute consultations with India regarding certain Indian
measures in the automotive and renewable energy sectors. China said the
measures in question include incentives to promote the production of advanced
chemistry cell batteries, automobile and auto components, and electric vehicles
in India. The request was circulated to WTO members on 20 October 2025.
China
is of the view the measures are contingent on the use of domestic over imported
inputs or are otherwise discriminatory against Chinese products and are
inconsistent with various provisions under the Agreement on Subsidies and
Countervailing Measures, the Agreement on Trade-Related Investment Measures,
and the General Agreement on Tariffs and Trade 1994.