China upset with India due to…, and approaches WTO with complaint against…

China has filed a complaint with the World Trade Organization (WTO), questioning India(BHARAT)’s Production Linked Incentive (PLI) for electric vehicles, automobiles, and advanced chemistry cell batteries. China has stated that these measures favor domestically manufactured products over imported ones, thereby discriminating against goods originating from China. China has alleged a violation of trade rules.

A communication issued by the WTO on October 20 stated that China has expressed the need to discuss these measures with India(BHARAT) under the WTO’s dispute settlement mechanism. The three measures questioned by China include the PLI for advanced chemistry cell battery storage, the PLI for the automobile and auto component industry, and a scheme to promote the manufacturing of electric cars in the country.

China’s move comes at a time when the European Union has imposed a 27% tariff on EVs manufactured there, and Chinese companies are seeking ways to increase sales in India(BHARAT). India(BHARAT) launched a PLI scheme for battery storage in June 2021. To qualify for the incentive, companies must commence manufacturing within two years of allocation and achieve at least 25% domestic value addition. Similarly, a PLI scheme for automobiles and auto components was launched in September 2021. A scheme for electric vehicles was approved in March last year.