India’s SPECS scheme under WTO scrutiny by US, UK, and Canada

The US, UK, and Canada have expressed concerns at the World Trade Organization (WTO) over India’s Make in India initiative and a range of related subsidy programmes. Their questions focused in particular on the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), as well as subsidies related to fisheries and agriculture. In response, India has provided clarifications on certain aspects and assured that additional details—especially concerning fishery subsidies and state-level industrial incentives—will be shared in due course.

At a recent meeting of the World Trade Organization (WTO), key member nations including the United States, the United Kingdom, and Canada raised a series of questions concerning India’s industrial subsidy programmes, particularly those linked to its flagship Make in India initiative. The queries centered around transparency, subsidy amounts, and the scope of incentives under various central and state-level schemes.

The discussion followed India’s late-2024 notification of its subsidy programmes to the WTO, which included initiatives aimed at boosting domestic manufacturing and technological advancement. Among the most scrutinized was the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). The US sought detailed information on the subsidy amounts disbursed under SPECS and the specific categories of electronic goods covered, as identified by Harmonized System of Nomenclature (HSN) codes. India responded that eligibility requirements and coverage vary by programme and product.

In addition to SPECS, the US also raised concerns over India’s Freight Subsidy Scheme and the Amended Technology Upgradation Fund Scheme. It questioned why two prominent initiatives—the Production Linked Incentive (PLI) Scheme and the Design Linked Incentive Scheme—were not included in the notification, despite their significance in India’s current industrial policy.

Canada echoed these concerns and, along with the US, sought clarity on a range of other programmes, including the Pradhan Mantri Kisan Sampada Yojana, which focuses on the modernization of food processing infrastructure. They also raised questions about India’s shipbuilding financial assistance policy and the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme.

The UK added to the scrutiny by asking whether the various subsidy schemes derive benefit from the Make in India initiative and whether they fall under the WTO’s category of notifiable subsidies, as defined by the Agreement on Subsidies and Countervailing Measures (SCM Agreement). It also pointed out the absence of fishery-related subsidies in India’s notification. India responded that further details would be provided in due course.

WTO members also expressed interest in subsidy policies implemented at the state level, including those of Karnataka, Gujarat, and Andhra Pradesh. These queries reflect a growing international focus on how India’s industrial policy aligns with global trade rules, particularly as it seeks to enhance domestic manufacturing through targeted financial incentives.