The World Trade Organization (WTO) announced that the People’s Republic of China has formally requested dispute consultations with the Government of India. The request targets specific Indian trade policies affecting solar cells, solar modules, and a range of information technology (IT) products.
China alleges that India’s current tariff treatment and domestic incentive structures create an uneven playing field that discriminates against Chinese imports and violates international trade obligations.
In its filing, circulated to WTO members on December 23, China identified several measures it deems inconsistent with global trade rules. Key areas of contention include:
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Production Linked Incentive (PLI) Schemes: China specifically challenges the “National Programme on High Efficiency Solar PV Modules.” It argues that the incentives provided are contingent upon “Local Value Addition” (LVA) requirements, which mandate the use of domestic inputs over imported components.
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Information Technology Tariffs: The dispute covers India’s tariff treatment of IT goods, including smartphones, semiconductor manufacturing machinery, and flat-panel display devices. China contends these duties exceed India’s bound rate commitments.
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National Treatment Violations: China asserts that these measures provide unfair competitive advantages to Indian domestic industries, thereby breaching the principle of “National Treatment,” which requires that imported goods be treated no less favorably than domestic ones.
China maintains that the Indian measures are inconsistent with several foundational WTO agreements:
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GATT 1994: The General Agreement on Tariffs and Trade.
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SCM Agreement: The Agreement on Subsidies and Countervailing Measures, specifically regarding prohibited “import-substitution” subsidies.
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TRIMS Agreement: The Agreement on Trade-Related Investment Measures, which prohibits policies that distort trade by favoring domestic products.
The request for consultations is the first formal step in the WTO’s dispute settlement mechanism. This phase allows both nations to discuss the matter privately to find a “mutually satisfactory solution” without the need for litigation.
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The 60-Day Window: Under WTO rules, the parties have 60 days to resolve the dispute through these consultations.
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Adjudication: If the consultations fail to reach a resolution within this period, China may request the establishment of a formal WTO adjudication panel to rule on the legality of India’s measures.
This move marks the second significant WTO challenge brought by China against India in late 2025, following a previous filing in October regarding India’s electric vehicle (EV) and battery manufacturing subsidies.
