Beijing, October 15, 2025: China has lodged a formal complaint with the World Trade Organization (WTO) against India’s electric vehicle (EV) and battery subsidy programs, claiming that these incentives give Indian manufacturers an “unfair competitive advantage” and harm China’s economic interests, according to a report by Reuters.
In a statement, China’s Ministry of Commerce said it would take “strong measures to safeguard the legitimate rights and interests of its domestic industries.” The move signals a new layer of tension in already sensitive trade relations between the two Asian economies.
India to Review China’s Submission
India’s Commerce Secretary Rajesh Agrawal said that the ministry would examine the detailed documents submitted by China. A senior official confirmed that China has filed similar complaints against Turkey, Canada, and the European Union (EU).
“They have sought consultations with India,” the official said. Under WTO rules, such consultations mark the first step in the dispute settlement process.
If no satisfactory resolution emerges from the consultations, China can request the WTO to set up a dispute panel to adjudicate the matter.
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India Among the Highest EV Subsidy Providers
According to a report by The Economic Times, India ranks among the world’s top nations in terms of EV subsidies. For example, the total direct and indirect subsidy on Tata Nexon EV—India’s best-selling electric car—amounts to nearly 46% of its retail price.
The benefits include a lower Goods and Services Tax (GST) compared to petrol and diesel models, road tax exemptions, and indirect support under the Production-Linked Incentive (PLI) scheme. In comparison, EV subsidies stand at around 10% in China, 16% in South Korea, 20% in Germany, and 26% in the United States and Japan.
Despite these generous incentives, India’s EV adoption rate remains modest, accounting for only 2% of total vehicle sales, one of the lowest among major economies.
Government Focuses on Charging Infrastructure
To strengthen the EV ecosystem, the Indian government has launched the PM eDRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme—successor to the FAME program—with a ₹2,000 crore budget to build a robust public fast-charging infrastructure.
Under the revised framework, the central government will cover at least 80% of the cost of upstream infrastructure for public charging stations, which may rise to 100% under special circumstances.
The Ministry of Heavy Industries (MHI) will release the subsidies in three phases:
- 30% upon tender approval,
- 40% after the installation of the charging station, and
- the remaining 30% after successful commercial operation.
China’s WTO complaint comes at a time when India is aggressively promoting self-reliance in clean energy and manufacturing through incentive-led industrial policies. The outcome of this dispute could have far-reaching implications for both nations’ EV sectors and their broader trade relationship.
