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China and India clash on solar panel protection and subsidies, as both seek strong production capacity
21/7/2026
10 min read
Feature
On 18 May, the Indian government rejected an attempt by the Chinese government to launch a formal dispute at the World Trade Organization (WTO) over claims from Beijing that India is illegally protecting its solar panel and module sector. It is a sign that the energy sector is changing worldwide that a major trading dispute with potential global impact involves two large emerging market giants – China and India – and concerns solar energy rather than flows of oil and gas, write Raghavendra Verma, Mark Godfrey and Keith Nuthall.
China claims India is breaching the Global Agreement on Tariffs and Trade (GATT) by charging 20% tariffs and an extra 7.5% charge (Agriculture Infrastructure and Development Cess – AIDC) on solar photovoltaic (PV) cells – 20% if they are made up into modules or panels.
It also complains that India’s Solar Module Programme pays Indian solar power technology producers unfair subsidies, based on certain technical requirements and minimum amounts of domestic added value in sourcing and production. This also breaches GATT, claims Beijing, as well as the WTO’s Trade Related Investment Measures (TRIM) Agreement and Subsidies and Countervailing Measures (SCM) Agreement.
Speaking at the May WTO Dispute Settlement Body (DSB) meeting, China said member states should avoid ‘restrictive and discriminatory measures that disturb competitive opportunities, disrupt supply chains, increase uncertainties for businesses and operators, and negatively affect the healthy development of global renewable energy and technology sectors’. Its government argued it had tried to resolve the dispute since consultations in December 2025 but failed. Indian diplomats responded that it was ‘strange that, despite the importance of a responsible and diversified supply chain, a country that is estimated to control more than 80% of the global value chain for solar module production feels it necessary to take actions to stymie the legitimate growth of this industry in other countries’, according to a WTO note.