New Delhi | India's support measures to promote manufacturing in the automobile and renewable energy sectors are fully compliant with World Trade Organisation norms and the country will strongly defend them at the WTO's dispute settlement panel meetings, an official said.
Following a request by China, the WTO dispute settlement body on Tuesday announced the setting up of a panel to hear the case.
The official said that India regrets China's decision to proceed with panel establishment despite extensive bilateral consultation on the matter in good-faith, during which India provided detailed explanations and clarifications on the measures.
"India is of the view that China's request for panel establishment reflects an incorrect understanding of both the design and operation of the measures at issue. India maintains that the measures challenged by China are fully consistent with India's rights and obligations under the WTO Agreements, including the GATT (General Agreement on Trade and Tariffs) 1994 and the Agreement on Subsidies and Countervailing Measures," the official said.
The country will participate constructively in the panel proceedings and will "vigorously" defend its measures and it is confident that the panel will find the measures to be consistent with WTO rules, the official added.
In October last year, in a complaint to the WTO Beijing alleged that certain conditions in India's Production Linked Incentive (PLI) schemes for advanced chemistry cell batteries, automobiles and the policy to promote the manufacturing of electric vehicles violate global trade rules by discriminating against Chinese goods and exporters. China is a major exporter of these products.
Seeking consultation is the first step of the dispute settlement process as per WTO rules. If the consultations requested by the complainant do not result in a satisfactory solution, it can request that the WTO set up a panel in the case to rule on the issue raised.
India and China are members of the World Trade Organisation (WTO). If a member country believes that a support measure under a policy or scheme of another member nation is harming its exports of certain goods, it can file a complaint under the dispute settlement mechanism of the WTO.
China is the second-largest trading partner of India. In the last fiscal, India's exports to China contracted 14.5 per cent to USD 14.25 billion against USD 16.66 billion in 2023-24. The imports, however, rose by 11.52 per cent in 2024-25 to USD 113.45 billion against USD 101.73 billion in 2023-24.
India's trade deficit with China has widened to USD 99.2 billion during 2024-25.