Trade friction: China takes India’s solar and IT policies to WTO; consultations initiated

China has escalated trade tensions with India by launching a dispute at the World Trade Organization (WTO) over New Delhi’s policies covering solar cells, solar modules and information technology goods, seeking formal consultations under the global trade body’s dispute settlement mechanism, Reuters reported.



The WTO said on Tuesday that China has requested dispute consultations with India, Reuters reported, marking the first procedural step in resolving trade disagreements under WTO rules.



“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 in a statement, quoted Reuters.





Earlier last week, China had moved the WTO against India by formally requesting consultations, challenging New Delhi’s tariffs on information and communication technology (ICT) products and subsidy measures in the solar sector, PTI reported.



In a statement, China’s Ministry of Commerce alleged that India’s measures violate multiple WTO obligations, including the principle of national treatment, and amount to import-substitution subsidies that are explicitly prohibited under WTO rules.



“They grant unfair competitive advantages to India’s domestic industries while undermining China’s interests,” the ministry said, urging India to honour its WTO commitments and promptly revise the disputed measures.



The latest move comes less than a week after India announced the imposition of anti-dumping duties on cold-rolled steel imports from China for a period of five years, a step New Delhi said was aimed at protecting its domestic industry.

In October, Beijing had sought consultations over what it described as unfair subsidies provided by India to its electric vehicle and battery sectors.

That earlier petition alleged that India’s incentive schemes for electric vehicles and batteries distorted competition and adversely affected Chinese manufacturers.



Under WTO rules, consultations are the first formal step in the dispute process, giving both sides a chance to sit across the table and try to settle their differences before the issue moves towards a dispute settlement panel.