China has escalated its trade dispute with New Delhi by asking the World Trade Organisation to establish a panel to examine support measures for solar cells, solar modules and information technology products, deepening friction between Asia’s two largest economies over industrial policy and market access.The request follows consultations held on February 10, 2026, after China filed the dispute in December 2025. Those talks failed to produce a mutually agreed settlement, prompting Beijing to move the case to the next stage of the WTO’s dispute settlement process. China has argued that tariff treatment on certain technology products and measures favouring locally produced goods over imports discriminate against its exports and breach multilateral trade rules.
At the centre of the case are policy tools New Delhi has used to build domestic manufacturing capacity in strategically important sectors. These include support for photovoltaic manufacturing, import-related measures and local-content preferences linked to solar deployment and technology supply chains. Beijing has cited provisions under the General Agreement on Tariffs and Trade 1994, the Agreement on Subsidies and Countervailing Measures, and the Agreement on Trade-Related Investment Measures.
The dispute lands at a sensitive moment for New Delhi’s clean-energy ambitions. From June 1, 2026, solar projects will be required to use photovoltaic modules made with locally manufactured solar cells under the expanded Approved List of Models and Manufacturers framework. The policy is designed to reduce dependence on imported components, especially from China, while supporting domestic investment in solar manufacturing. Industry participants have warned, however, that available domestic cell capacity remains below annual demand, raising the risk of higher panel prices and delays in project execution.
Solar manufacturing has become a strategic priority as New Delhi seeks to reach 500 GW of non-fossil fuel capacity by 2030. Domestic module capacity has expanded rapidly, helped by production-linked incentives and strong project pipelines, but cell manufacturing has lagged behind module assembly. Many companies still rely heavily on imported cells, wafers and upstream inputs. Tata Power, Reliance Industries, Adani Group companies and other manufacturers have announced or advanced investments in solar cell and module facilities, but the transition to a deeper domestic supply chain remains uneven.
China’s challenge also covers information technology goods, an area in which Beijing has long objected to duties and customs treatment affecting products used in digital infrastructure and electronics manufacturing. China remains a dominant supplier of electronics components, telecom equipment, solar cells and related intermediate goods to India’s market. That dependence has complicated New Delhi’s effort to expand local manufacturing while limiting exposure to supply disruptions and geopolitical risk.
The move adds to a growing set of WTO disputes between the two neighbours. Earlier this year, China sought a WTO panel in a separate case involving India’s incentive schemes for automobiles, batteries, electric vehicles and renewable energy-related sectors. A panel was later established after the dispute could not be resolved through consultations. Together, the cases indicate that Beijing is using the WTO framework to contest policy measures that New Delhi sees as essential to industrial upgrading and energy security.
Bilateral trade figures sharpen the stakes. India’s exports to China rose to $19.47 billion in 2025-26, while imports from China increased to $131.63 billion. The deficit widened to $112.6 billion, underscoring the imbalance in a relationship marked by deep commercial dependence and persistent political mistrust. Electronics, machinery, chemicals, solar components and battery-related goods form a large part of the import basket.
For New Delhi, the dispute highlights the legal risks attached to industrial policy at a time when major economies are using subsidies, local sourcing rules and tariff tools to secure supply chains. The United States, European Union, China and other economies have all expanded state support for clean technology and advanced manufacturing. The WTO system, however, continues to test whether those measures distort trade or unfairly favour domestic producers.