India's burgeoning electric vehicle (EV) and battery manufacturing sector is a source of concern for China. With the Indian government's Production-Linked Incentive (PLI) schemes and EV policies vigorously promoting domestic production, India is fast emerging as a significant player in the global EV market. This rapid development, however, has not gone down well with Beijing, which has now filed a formal complaint against India at the World Trade Organization (WTO), alleging that these policies infringe upon global trade rules and mimic its own industrial strategy.
India's Growth and China's Unease
The core of China's complaint revolves around India's PLI scheme and EV policy, while these initiatives provide subsidies to Indian companies to boost local manufacturing of electric vehicles and batteries. China argues that these subsidies create an unfair playing field for foreign companies and. Aim to reduce imports by promoting local products, which it claims violates WTO regulations. According to WTO rules, such disputes typically begin with consultations. Interestingly, China has filed similar complaints against Turkey, Canada, and the European Union for their support of green technologies.
Beyond economic growth, India's strategy also incorporates national security, aiming to reduce dependence on imports. The EV and battery industries are crucial to this objective. The government has offered specific incentives to increase domestic production in these high-tech sectors, positioning India to become a major manufacturing hub. This trajectory is a cause for concern for China, as India's advancements challenge its long-held dominance in global manufacturing.
The Real Concern for China
Ironically, the policies China is accusing India of adopting bear a striking resemblance to China's own industrial strategies over the past few decades. China itself leveraged substantial subsidies, cheap loans, and protectionist measures to foster its domestic industries, transforming itself into the world's largest manufacturing powerhouse. Now, as India begins to adopt a similar, albeit less aggressive, model, China seems perturbed, likely fearing a shift in global market share and manufacturing influence.
