India blocks China's request for setting up panel in WTO against India's auto scheme

New Delhi: India has blocked China's request for the setting up of a dispute panel at the WTO in a case that Beijing has filed against New Delhi's incentive schemes for auto, battery and electric vehicles, an official said on Tuesday.

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Earlier this month, China has requested the WTO's dispute settlement body to set up the panel after bilateral consultations failed to resolve the dispute.

In October last year, 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.

In a communication to the World Trade Organisation (WTO), China has stated that consultations were held on November 25, 2025, and January 6, 2026, with a view to reaching a mutually agreed solution. Unfortunately, those consultations failed to resolve the dispute, it said.

In a meeting of the WTO's dispute settlement body (DSB), "India blocked a request from China for the establishment of a dispute panel regarding certain Indian measures in the automotive and renewable energy sectors," the Geneva-based official said.

As per norms, China can renew its request at the next DSB meeting.

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.

Both 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.

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