27 Jan 2026
In this update:
Partner: Dhruv Gupta, Counsel: Bhargav Mansatta, Senior Associate: Sourabh Kumar.
The Directorate General of Trade Remedies (DGTR) initiated three trade remedy investigations in the fourth quarter of 2025 to examine whether anti-dumping duties need to be imposed or continued on certain imports into India. These investigations focus on products, including nylon 6 chips and granules, polyester textured yarn and halo isobutene-isoprene rubber.
The governments of exporting countries, exporters, and importers of these products in India are expected to actively respond to these investigations to avoid or minimise the impact of trade remedy measures on their businesses.
The DGTR has recommended definitive trade remedy measures on three products, including toluene di-isocyanate (TDI), clear float glass and fluoroelastomers.
The implementation of these recommendations is awaited.
The Ministry of Finance (MoF) has imposed/continued definitive trade remedy measures (anti-dumping) on seven products – calcium carbonate filler masterbatch, 1,1,1,2- tetrafluoroethane or R-134a, cold rolled non-oriented electrical steel, liquid epoxy resins, hot rolled flat products of alloy or non-alloy steel, and flax fabrics. The MoF has also imposed a safeguard duty on non-alloy and alloy steel flat products.
In contrast, the MoF has not implemented the final findings of DGTR, which recommended the imposition of anti-dumping duties in several cases. These include key products such as halogenated isobutylene isoprene rubber (HIIR), azo pigments, PVC suspension resins, acrylic fibre, glass fibre, polytetrafluoroethylene (PTFE), solar cells or modules, soda ash, certain cranes, acrylonitrile Butadiene Rubber (NBR), and others.
In the last quarter of 2025, China initiated two separate requests for consultation with India at the World Trade Organisation (WTO), challenging Indian measures in the automotive, renewable energy, solar, and IT sectors.
On 15 October 2025, China sought consultations with India concerning measures impacting trade in the automotive and renewable energy technology sectors. The request, representing the first step in the formal dispute settlement process, focuses on three incentive programmes which China alleges are contingent on the use of domestic goods over imported goods. The specific measures challenged by China are:
China contends that the financial incentives provided under these programmes are conditional upon beneficiaries achieving specific Domestic Value Addition (DVA) targets. For example, the PLI ACC Scheme requires firms to achieve a DVA of 25% within two years, increasing to 60% within five years. Similarly, the PLI Auto Scheme and the EV Passenger Cars Scheme require products to achieve at least 50% DVA to be eligible for incentives.
China argues that these DVA requirements violate India’s WTO obligations by affording less favourable treatment to imported goods than to like domestic goods. China alleges that these measures are inconsistent with General Agreement on Tariffs and Trade 1994 (GATT 1994), the Agreement on Subsidies and Countervailing Measures (SCM Agreement), and the Agreement on Trade-Related Investment Measures (TRIMs Agreement).
On 19 December 2025, China formally requested consultations with India regarding trade measures in the solar and information technology sectors. This request addresses two main areas of concern.
The first challenge relates to India’s customs duties on various technology products, such as solar cells, smartphones, and machinery for manufacturing semiconductors. China alleges that these tariffs, together with the Agriculture Infrastructure and Development Cess (AIDC), exceed the maximum “bound” rates India has committed to in its WTO Schedule of Concessions.
The second measure under scrutiny is India’s “Production Linked Incentive Scheme: National Programme on High Efficiency Solar PV Modules“. China contends that the financial incentives provided to manufacturers are contingent upon meeting a minimum Local Value Addition (LVA) requirement, which constitutes a prohibited subsidy favouring domestic goods over imported Chinese goods. China claims that these measures are inconsistent with India’s obligations under the GATT 1994, the SCM Agreement, and the TRIMs Agreement.
Based on precedents from similar disputes at the WTO, measures involving domestic content requirements have historically been difficult to defend. This suggests that the Indian domestic industry should prepare for the possibility of an adverse ruling, which could lead to the removal of these protective measures. Accordingly, it is advisable for the domestic industry to proactively strengthen its competitiveness to withstand heightened import competition and explore alternative support mechanisms that comply with WTO regulations.
In December 2025, India and New Zealand successfully concluded negotiations on a comprehensive Free Trade Agreement (FTA), marking a significant milestone in their bilateral economic relations.
The agreement is notably beneficial for India, as it secures the elimination of duties on 100% of Indian exports to New Zealand. Key highlights include a significant investment commitment of USD 20 billion from New Zealand over 15 years, aimed at strengthening long-term economic cooperation. The FTA also offers a major boost to India’s labour-intensive sectors such as textiles, leather, and engineering goods by providing zero-duty access, while strategically protecting sensitive domestic sectors like dairy and agriculture.
Further, the agreement extends beyond trade in goods, creating significant opportunities in services, mobility, and education. It introduces new visa pathways for skilled Indian professionals and offers extended post-study work visas for students, particularly in STEM disciplines. Regarding implementation, the agreement is expected to be signed upon completion of domestic procedures in both countries. Although the detailed text of the FTA is not yet publicly available, it is anticipated to enter into force after the ratification process is completed, with a timeline envisaged for later this year.
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