indian-firms-received-less-support-than-chinese-oecd

Indian firms received considerably less government support than their Chinese peers over 2005–2024, according to an OECD (Organisation for Economic Co-operation and Development) report.

The OECD MAGIC Database of Industrial Subsidies tracks what companies actually receive (rather than what governments report), covering 525 of the world’s largest manufacturers across 15 major sectors from 2005 to 2024. It captures three main types of support: grants, income tax breaks, and below-market financing such as low-cost loans from state-owned banks.

“Between 2005 and 2024, Chinese firms received on average three to eight times more government support than firms based in the OECD, a conservative estimate,” the report noted. “These subsidies were also substantially higher than those received by firms in non-OECD economies such as Brazil, India, and Indonesia.”

 

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According to the report, this gap is a significant driver of China’s manufacturing competitiveness. The OECD is an intergovernmental organisation of 38 largely advanced economies that aims to support economic growth, trade, investment, and policy coordination. Its members include countries such as the United States, the United Kingdom, Canada, Germany, France, Italy, Japan, South Korea, and Australia.

The study also found that about 22% of global market share gains achieved by expanding firms between 2005 and 2023 can be attributed to government subsidies. For Chinese firms specifically, nearly 60% of their global market share gains were linked to the subsidies they received, the report said.

Additionally, it highlighted that WTO members failing to submit subsidy notifications increased from 26 in 1995 to 117 in 2025—rising from 23% to 70%—which it warned is weakening trust in global markets.

India, however, is also noted as a significant player in several covered sectors, including steel, cement, fertilisers, heavy machinery, and glass and ceramics, with relatively cleaner subsidy profiles compared to peers.