India Blocks China’s WTO Panel Request Against Solar PLI Scheme

India has blocked China’s first request at the World Trade Organization (WTO) to form a dispute settlement panel over New Delhi’s solar manufacturing incentives under the Production Linked Incentive (PLI) scheme and higher import duties on select technology products.

The dispute dates back to December 2025, when China challenged India’s solar PLI scheme, arguing that local value addition requirements attached to incentives unfairly favour domestic manufacturers and violate WTO trade rules.

China also objected to India’s import duties and additional cess imposed on products such as smartphones, semiconductors, integrated circuits, wafers and display manufacturing equipment, claiming the tariffs exceed India’s commitments under WTO agreements.

After consultations between the two countries failed to resolve the issue, China requested the WTO’s Dispute Settlement Body (DSB) to establish a panel to adjudicate the matter. However, India exercised its right to block the first request during the latest DSB meeting.

Under WTO rules, China can renew its request in the next DSB meeting, where the panel is likely to be constituted automatically unless there is a consensus against it.

India defended its measures, stating that the solar PLI scheme complies with WTO norms and is aimed at strengthening domestic renewable energy manufacturing capacity.

Indian representatives also pointed to China’s dominance in the global solar supply chain, noting that the country controls nearly 80 percent of the worldwide solar module value chain. India argued that efforts by countries to build local manufacturing ecosystems should not be discouraged through trade disputes.

The dispute highlights broader global tensions around clean energy manufacturing, semiconductor supply chains and strategic efforts by nations to reduce import dependence.