New challenge: ‘Make in India’ gets a pushback from US, China
Times of India
by TOI BUSINESS DESKFebruary 26, 2026
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India’s ambitious "Make in India" initiative, aimed at transforming the country into a major global manufacturing hub, is facing significant pushback from the United States and China—two of the world's largest economies. Launched by the Modi government in 2020, this program seeks to boost domestic manufacturing across key industries, including electronics, pharmaceuticals, solar energy, and medical devices, with a total allocation of ₹1.91 trillion ($21 billion). However, trading partners argue that these production-linked incentives (PLIs) violate international trade rules by giving Indian companies an unfair advantage over foreign competitors.
The U.S. recently imposed preliminary tariffs of 126% on solar equipment imports from India, citing unfair government support. Similarly, the World Trade Organization (WTO) has established a panel to review China’s complaint that India's PLI schemes favor domestically produced goods, disadvantaging Chinese exporters. Despite these challenges, India maintains that its policies align with WTO regulations and will continue to defend them. These incentives are central to India’s goal of increasing manufacturing’s contribution to GDP to 25% by 2030, up from the current 17%.
The criticism comes at a critical time for India’s relations with both the U.S. and China. While India has recently resolved trade tensions with the U.S., it continues to navigate complex ties with China. The stakes are high, as "Make in India" is seen as a key driver of economic growth and job creation. Experts warn that rising opposition from major trading partners could complicate India’s efforts to strengthen its manufacturing sector.
Meanwhile, the U.S. and China are themselves under scrutiny for their own subsidy policies. In 2024, Beijing challenged aspects of the U.S. Inflation Reduction Act, arguing it unfairly disadvantaged Chinese goods. Similarly, European nations have accused China of using large-scale subsidies to boost industries like electric vehicles. These developments highlight the growing tensions over trade policies and fair competition in the global economy.
The outcome of these disputes will not only shape India’s manufacturing future but also set precedents for international trade rules. As India seeks to expand
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Originally published on Times of India on 2/26/2026