China has filed a complaint with the World Trade Organization (WTO) against India’s solar photovoltaic subsidies, alleging that they provide an unfair competitive advantage to Indian companies and harm Chinese interests. The complaint, submitted by the Chinese Ministry of Commerce, claims that India’s import substitution subsidies violate WTO obligations. China argues that these subsidies are prohibited by the WTO and has urged India to correct its practices and abide by its commitments.
This is the second dispute China has raised against India at the WTO over clean energy in two months. In October, China filed a complaint against India’s subsidies for electric vehicles (EVs) and batteries, claiming that they violate multiple WTO obligations, including the principle of national treatment. China contends that India’s subsidies could be used to protect domestic production, which is prohibited by WTO rules.
The dispute between China and India over clean energy is not new. In 2023, China raised a “Specific Trade Concern” against India’s regulation that requires the use of domestically manufactured solar modules for all projects in the country. China considers this regulation, known as the Approved List of Models and Manufacturers (ALMM) mandate, to be a trade barrier that effectively bars Chinese manufacturers from supplying to India.
Despite their differences, China and India have found common ground on some issues, such as the European Commission’s Carbon Border Adjustment Mechanism. Both countries have expressed concerns over the proposed carbon tax, which would impose tariffs on carbon-intensive products imported into Europe. China and India have argued that the tax would unfairly penalize their industries and have raised their concerns at the WTO.
The complaint filed by China against India’s solar photovoltaic subsidies is a significant development in the ongoing trade tensions between the two countries. It highlights the complexities of international trade and the challenges of promoting clean energy while ensuring fair competition. The WTO will likely play a crucial role in resolving this dispute and ensuring that both countries comply with their trade obligations.