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WTO Forms Dispute Panel Over China’s Challenge to India’s Auto and Renewable PLI Schemes

The World Trade Organization has constituted a dispute settlement panel to review a complaint filed by China against India concerning its policies in the automotive and renewable energy sectors. The move follows unsuccessful bilateral consultations held on November 25, 2025, and January 6, 2026, which failed to produce a mutually agreed resolution.

China has alleged that India’s Production Linked Incentive (PLI) programmes and related measures create discriminatory conditions for foreign suppliers, particularly in areas such as advanced chemistry cell batteries and electric vehicle manufacturing. According to the complaint, these provisions may be inconsistent with WTO trade rules. The newly formed panel will now examine the claims through the organisation’s formal dispute settlement mechanism.

The development comes amid significant trade imbalances between the two countries. China remains India’s second-largest trading partner; however, trade data for 2024–25 show India’s exports to China declined by 14.5 percent to USD 14.25 billion, while imports increased by 11.52 percent to USD 113.45 billion, resulting in a trade deficit of USD 99.2 billion.

Officials note that the panel’s findings could carry broader implications for stakeholders in the automotive and renewable energy industries, as well as for policymakers navigating bilateral trade relations between the two nations.