China complains against India at WTO over IT goods tariff, solar scheme

China has approached the WTO seeking dispute consultations with India over import duties on IT goods and local value norms under the solar PV production-linked incentive scheme

China has filed a complaint at the World Trade Organisation (WTO) against India, seeking dispute resolution over New Delhi’s imposition of import duties on IT goods and certain norms under the production-linked incentive (PLI) scheme for solar PV modules.

 

According to WTO rules, seeking consultation is the first step towards the dispute settlement process.

 

China has claimed that India’s imposition of customs duties on various tech products allegedly exceeds global tariff limits. They include items such as semiconductor devices, telephone for cellular or wireless networks, machines for manufacturing of semiconductor devices, among other items.

 

It has also challenged the PLI scheme on solar PV modules, arguing that the local value addition norms are inconsistent with international trade agreements such as GATT, 1994, as well as WTO’s agreement on subsidies and countervailing measures. As a result, the scheme acts as a subsidy, contingent upon the use of domestic products instead of imported ones. 

The PLI scheme on PV modules was launched in 2021 to attract investment, boost domestic manufacturing in the sector and reduce dependence on imports.

 

“China said the measures in question include India's tariff treatment and certain measures that China said are contingent upon the use of domestic inputs and otherwise discriminate against Chinese imports,” the WTO said on Tuesday. The request was circulated to WTO members on December 23.

 

“China contends the Indian measures are inconsistent with various provisions of the WTO's General Agreement on Tariffs and Trade (GATT) 1994, the Agreement on Subsidies and Countervailing Measures, and the Agreement on Trade-Related Investment Measures,” it said.

 

In case consultations requested with India do not result in any positive outcome, China can urge the global trade body to set up a panel to rule on the matter that has been raised.

  China is India’s second largest trade partner and largest source of imports. During the first seven months of the current financial year (April-October), India exported goods worth $10 billion to China. During the same time period, imports stood at nearly $74 billion.