China Challenges India at WTO Over ICT Tariffs, Solar Subsidies

China’s Ministry of Commerce lodged a request for consultations at the World Trade Organization on December 19, 2025, formally challenging a suite of Indian measures that Beijing says distort trade in information and communications technology products and solar panels. The ministry, speaking through a spokesman in Beijing, characterised the contested policies as violating “the principle of national treatment” and as constituting “import substitution subsidies explicitly prohibited under WTO rules.” It also said the measures “grant unfair competitive advantages to India’s domestic industries while undermining China’s interests.”

The consultations request marks the first procedural step in the WTO dispute settlement system. Under WTO rules, consultations are a mandatory, time limited effort to resolve differences bilaterally, normally within 60 days of the request unless the parties agree otherwise. If consultations do not produce a negotiated outcome, China may ask for a panel to adjudicate the matter.

Beijing named two broad categories of Indian action in the filing. The first is a set of tariffs on ICT goods that China alleges disadvantage imports and shield domestic producers. The second encompasses subsidies and incentive programmes in the photovoltaic sector. Multiple reports referenced India’s Production Linked Incentive schemes as part of the contested package, noting that payments tied to domestic production and performance are central to New Delhi’s industrial strategy.

This complaint is the second WTO action China has mounted against India in 2025. In October, China requested consultations over alleged unfair subsidies for electric vehicles and battery manufacturing. Taken together, the two filings signal a pattern of legal challenges to India’s use of industrial policy to accelerate strategic manufacturing sectors.

The dispute will be watched closely by global manufacturers and investors because India is pursuing active policies to localise production of technologies that are critical to green energy and digital infrastructure. Tariffs and PLI style subsidies are intended to encourage domestic value added, but they also raise costs for trading partners and can prompt retaliatory measures or formal WTO grievances. For Chinese exporters of ICT components and solar modules, the complaint introduces the prospect of restricted market access and heightened policy uncertainty.

Beyond immediate commercial effects, the case tests where WTO law draws lines around national treatment and subsidies in an era of industrial competition. WTO panels and the appellate body have in recent years grappled with how to treat subsidies that aim to shift global supply chains toward domestic production. A ruling on India’s measures could have broader implications for how countries design incentives for green technology and digital sectors.

For New Delhi the challenge is political as well as legal. Indian officials have defended the PLI programmes as essential to creating jobs and building resilient domestic supply chains in strategically important industries. A WTO dispute, however, can constrain policy space by requiring adjustments or facing countermeasures if measures are found inconsistent.

The immediate next step is bilateral consultations. If those fail, the parties will move to a panel proceeding and a more formal evidentiary phase that can take a year or more. The case underscores the growing role of trade litigation as a tool in high stakes industrial rivalry between the world’s two most populous economies.