On December 19, 2025, Beijing announced that China was filing a request with WTO for consultations concerning Indian laws regarding subsidies to its photovoltaic or solar industry and its tariffs on information and communication technology products which impact the clean energy sector--indicating the growing trend toward increased trade friction in global clean energy trade.
The Ministry of Commerce stated that the above-mentioned trade policies violate basic international trade law and disadvantage Chinese manufacturers. The WTO complaint alleges unfair treatment towards Chinese manufacturers according to international trading principles. This is the second WTO complaint that China has brought against India within the last few months, the first was about subsidies provided by India to electric vehicle and battery manufacturers in October 2025 to promote their emerging clean energy industries.
Core of the Dispute: Allegations of "Prohibited Subsidies"
China's case centers on the accusation that India's support for its local solar manufacturing constitutes "import substitution subsidies," which are explicitly prohibited under WTO agreements. The Chinese commerce ministry argues that these measures, combined with related tariff policies, breach several fundamental WTO obligations.
The following table summarizes the key legal allegations put forward by China:
| WTO Principle Allegedly Violated | What It Means | China's Allegation Against India |
|---|---|---|
| National Treatment | Imported products must be treated no less favorably than domestically produced ones. | India's subsidies create an unfair advantage for domestic Indian solar manufacturers over imported Chinese goods. |
| Bound Tariff Rates | Members must not apply tariffs above the negotiated and "bound" ceiling for a product. | India's tariffs on related ICT products are alleged to exceed its committed rates. |
| Prohibition of Import Substitution Subsidies | Subsidies that are contingent on the use of domestic over imported goods are forbidden. | India's PV subsidies are linked to the use of locally manufactured content, discriminating against imports. |
A spokesperson for China's Ministry of Commerce stated that these measures "give India's domestic industries an unfair competitive advantage and harm China's interests". The spokesperson further emphasized that this legal action is "another firm step by China to safeguard the legitimate rights and interests of its domestic industries" and urged India to "abide by its relevant WTO commitments and immediately correct its erroneous practices".
Broader Context: A Clash of Solar Ambitions
Dispute is not an isolated incident but a manifestation in a continued growing competition between the two global powers to dominate the coming clean energy future.
"Make in India" Push By India: India has strongly promoted the creation of a domestic manufacturing base by launching production linked incentive (pli) programs along with other support programs to decrease dependence on imported solar components from china and to develop its own self-sustaining green economy.
Defensive Action By China: As the leading manufacturer of solar photovoltaic cells in the world, china is using the wto mechanisms available to challenge domestic policies it believes are discriminating against china and distorting the solar market. This situation is similar to the ongoing tensions between u.s. and china over the trade in solar products.
The complaint filed by india with the wto arrives at a time when india's solar industry is under investigation by the u.s. government for anti-dumping and countervailing duties, with an outcome anticipated latest by early 2026.
A Path Forward and Systemic Challenges
Filing a "request for consultations" marks the beginning of the first formal stage of the dispute settlement process at the WTO. For the next 60 days, both countries will be able to participate in discussions aimed at resolving the issue. If discussions do not succeed, then China may file a request with the WTO to create a panel to settle the dispute.
At the same time, this situation is happening in the context of a significant crisis within the WTO's dispute settlement system. Since 2019, the Appellate Body, which is sometimes referred to as the highest court of the WTO, has been unable to function because there have been no appointments. Even though WTO law is still binding, the lack of an appellate system creates uncertainty around how disputes will be resolved and how final decisions will be enforced.
