China moves WTO over India's EV, battery subsidies, cites 'unfair edge'

China on Wednesday filed a complaint with the World Trade Organization (WTO) over India's electric vehicle (EV) and battery subsidies, claiming that the measures give an "unfair competitive advantage" to the domestic manufacturers and undermine China's interests, Reuters reported.

In a statement, China's Ministry of Commerce said it will take "firm measures" to effectively safeguard the legitimate rights and interests of its domestic industries.

According to a report in The Economic Times, India offers the highest subsidies on electric cars among major countries of the world. For the electric version of the Tata Nexon, India’s best-selling EV, total subsidies, both direct and indirect, amount to roughly 46 per cent of its price.

These benefits include reduced Goods and Services Tax (GST) and road tax compared to petrol and diesel models, along with indirect support received by the manufacturer through the production-linked incentive (PLI) scheme, the report added. In comparison, top-selling models in China get a subsidy of 10 per cent, 16 per cent in Korea, 20 per cent in Germany, and 26 per cent in both the US and Japan.

Despite such a high subsidy offering, India only has a two per cent penetration of electric vehicles, the lowest when compared to other countries.

Business Standard in January reported that under the ₹2,000-crore PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM eDRIVE) scheme, introduced as a successor to the FAME programme, the central government will cover at least 80 per cent of the cost of building upstream infrastructure for public fast-charging stations nationwide. In special cases, the subsidy may go up to 100 per cent, according to the revised policy framework.

Under the scheme, the Ministry of Heavy Industries (MHI) was said to release 30 per cent of the subsidy once the tender is awarded, and 40 per cent after the installation of the electric fast-charging station, and the remaining balance after successful commercial operation of the station.