Green Industrial Policies and WTO Rules China’s Case Against India
Context
China has filed a fresh complaint against India at the World Trade Organization WTO challenging India’s solar subsidies and tariff measures, reflecting growing disputes over green industrial policies after a similar complaint in October 2025 on EV and battery subsidies.
Issue Raised by China
Nature of Complaint
. China has sought formal consultations with India under the WTO framework
. The complaint relates to India’s photovoltaic solar sector support policies
Core Allegations
. Alleged violation of bound tariff commitments
. Alleged breach of national treatment obligations
. Claim of prohibited import substitution subsidies favouring domestic manufacturers
Implications for India
Policy Space and Trade Rules
. Tension between Make in India and WTO disciplines
. Challenge of designing green industrial policy within multilateral rules
Economic and Strategic Impact
. Possible impact on solar manufacturing ecosystem
. Increased trade frictions with China in clean energy sectors
WTO Dispute Settlement System Overview
Institutional Framework
. A rules based compulsory multilateral mechanism
. Operates under the Dispute Settlement Understanding DSU
Core Objectives
. Ensure predictability and stability in global trade
. Prevent unilateral trade retaliation
Stages of WTO Dispute Settlement
Consultations
. First and mandatory stage
. Emphasis on amicable negotiated solutions
Panel Stage
. Independent panel examines facts and legal arguments
. Determines violation of WTO rules
Appellate Review
. Appeal limited to points of law
. Appellate Body currently non functional
Adoption and Implementation
. Reports adopted by Dispute Settlement Body DSB
. Rulings become legally binding
. Compliance required within a reasonable period of time
Retaliation
. Allowed only with DSB authorisation
. Countermeasures must be proportionate
Key Features of WTO Dispute Settlement
Legal Nature
. Compulsory jurisdiction for all WTO members
. Exclusive forum for multilateral trade disputes
Procedural Aspects
. Time bound process of around 12 months
. Ban on unilateral sanctions without WTO approval
Conclusion
The complaint highlights growing global disputes over climate related subsidies. Its outcome will shape how countries like India balance renewable energy expansion with WTO compliant trade practices, influencing the future of green industrial policy under the multilateral trading system.
Source : TOI