Lok Sabha Question No. 4012 (UNSTARRED), answered on 2026-03-17
Subject: WTO Dispute Initiated by China Against PLI Scheme
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Sasikanth Senthil

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

## LOK SABHA UNSTARRED QUESTION NO. 4012 ANSWERED ON 17/03/2026

## WTO DISPUTE INITIATED BY CHINA AGAINST PLI SCHEME

## 4012.   SHRI SASIKANTH SENTHIL:

Will the Minister of COMMERCE AND INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- (a) whether  it  is  a  fact  that  China  has  initiated  dispute  settlement  proceedings against India   at World Trade Organisation (WTO) challenging certain aspects of India's Production Linked  Incentive  (PLI)  schemes,  if  so,  the  details thereof;
- (b) the  specific  PLI  Schemes  run  by  different  Ministries  and  provisions  of  the specific PLI schemes that have been contested and WTO agreements under which challenge has been filed;
- (c) whether Government has conducted a legal and economic assessment of the potential  implications  of  an  adverse  WTO  ruling  on  firms  that  have  made investments under PLI scheme, if so, the details thereof;
- (d) the manner in which the Government compensate the firms that have already made investments and have met the production requirements of PLI scheme, if the Government loses WTO dispute;
- (e) the  total  incentives  disbursed  under  various  PLI  schemes  to  date  and  the sectors that may be directly affected by the dispute; and
- (f) whether the Government has initiated consultations with affected industries, in States such as Tamil Nadu, to safeguard investments and employment, if so, the details thereof?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY

वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री ( श्री णिणिन प्रसाद ) (SHRI JITIN PRASADA)

(a)  to  (f)  China  has  initiated  two  disputes,  DS642  and  DS644,  at  the World Trade Organisation (WTO) challenging certain aspects of India's Production Linked Incentive (PLI) schemes. In DS642, China has challenged two PLI schemes viz. PLI Scheme National  Programme on Advanced Chemistry Cell (ACC) Battery Storage and PLI Scheme for the Automobile and Auto Component Industry, both administered by the Ministry  of  Heavy  Industries.  In  DS644,  China  has  challenged  the  PLI  Scheme: National  Programme  on  High  Efficiency  Solar  PV  Modules  administered  by  the Ministry of New and Renewable Energy.

China has challenged Domestic Value Addition (DVA) or Local Value Addition (LVA) requirements  under  the  PLI  Schemes  allegedly  to  be  inconsistent  with  India's obligations  under  Articles  3.1  (b)  &  3.2  of  the  Agreement  on  Subsidies  and Countervailing Measures (SCM Agreement); Article III:4 of the General Agreement on Tariffs and Trade (GATT) 1994, and Article 2.1 of the Agreement on Trade-Related Investment Measures (TRIMs).

India has contested the claims of China and has maintained that the measures under the PLI schemes are fully consistent with India's rights and obligations under the WTO Agreements.  The  Government  closely  monitors  WTO  disputes  and  undertakes necessary legal and economic assessments regarding their implications. The matter is sub judice under the WTO dispute settlement process.

As on 12 March 2026, Rupees 2,386.36 crores have been disbursed under the PLI Scheme for the Automobile and Auto Component Industry. No incentives have been disbursed under the other two PLI schemes.

The Government holds consultations with industry stakeholders from time to time to understand their concerns and safeguard their interests.

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