China moves WTO over India's EV, battery subsidies, cites 'unfair edge'

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China on Wednesday filed a complaint with the World Trade Organization (WTO) over India's electric vehicle (EV) and battery subsidies, claiming they give an "unfair competitive advantage" to the domestic manufacturers and undermine Beijing's interests, Reuters reported.

 

In a statement, China's Ministry of Commerce said it will take "firm measures" to effectively safeguard the legitimate rights and interests of its domestic industries.

 

According to a report in The Economic Times, India offers the highest subsidies on electric cars among major countries of the world. For the electric version of the Tata Nexon, India’s best-selling EV, total subsidies, both direct and indirect, amount to roughly 46 per cent of its price.

 

These benefits include reduced Goods and Services Tax (GST) and road tax compared to petrol and diesel models, along with indirect support received by the manufacturer through the production-linked incentive (PLI) scheme, the report added. In comparison, top-selling models in China get a subsidy of 10 per cent, 16 per cent in Korea, 20 per cent in Germany, and 26 per cent in both the US and Japan.

 

Despite such high subsidies, India has achieved very low EV adoption, making up just two per cent of the vehicle market, which is the lowest when compared to other countries.

 

Business Standard reported in January that under the ₹2,000-crore PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM eDRIVE) scheme, introduced as a successor to the FAME programme, the central government will cover at least 80 per cent of the cost of building upstream infrastructure for public fast-charging stations nationwide. In special cases, the subsidy may go up to 100 per cent, according to the revised policy framework.

 

Under the scheme, the Ministry of Heavy Industries (MHI) was said to release 30 per cent of the subsidy once the tender is awarded, and 40 per cent after the installation of the electric fast-charging station, and the remaining balance after successful commercial operation of the station.

 

MHI extends the PM E-DRIVE subsidy scheme for two years

 

In August, the Ministry of Heavy Industries extended the PM E-DRIVE subsidy scheme for two years, for certain segments including e-trucks, e-ambulances, ebuses, and charging infrastructure, which will now get subsidies till March 31, 2028.

 

According to a government notification issued on August 7, 2025, subsidies for electric two-wheelers, e-rickshaws, electric three-wheelers, and electric carts will be discontinued after March 2026.