New Delhi/Beijing: China has officially complained to the World Trade Organization (WTO) about India’s subsidies for making electric cars (EVs) and batteries. The Ministry of Commerce of the People’s Republic of China (MOFCOM) says that the complaint says that India’s subsidies constitute a form of import substitution, which is against WTO rules.
China says that these subsidies offer Indian businesses an unfair edge in the developing battery and electric vehicle (EV) markets. The Chinese government has asked the WTO for consultations, telling India to fix what it called “wrong practices.” MOFCOM also said that it would do anything to protect the interests of its own industries that are hurt by India’s actions.
What India Said
Officials from India’s Commerce Ministry said they would look over China’s detailed representations very carefully. They said that Beijing has made similar allegations against Canada, Turkey, and the European Union.
India has been looking more closely at Chinese imports since September, when it started a series of anti-dumping investigations into a number of product categories, such as mobile phone covers, solar cell encapsulants, rubber compounds, and acids.
Sino-Indian Relations Despite Trade Problems
Relations between India and China have gotten better, even as trade tensions are rising. In August, Prime Minister Narendra Modi went to China for the Shanghai Cooperation Organization (SCO) conference, where he talked with Chinese President Xi Jinping.
Also, the two countries are slated to start flying directly to one other again this month, after a break since the Covid-19 pandemic in 2020.
The WTO complaint shows how hard it is to strike a balance between being economically competitive and being diplomatic. India and China are trying to follow trade regulations while also keeping their larger ties with each other.