China's Ministry of Finance has announced significant adjustments to its export tax rebate policies, effective April 1, 2026. Beijing will cancel or reduce value-added tax (VAT) rebates on 249 products, including critical items such as solar cells, ceramic roof tiles, and lithium hexafluorophosphate. Additionally, rebate rates for 22 battery-related goods, including lithium-ion batteries, will be lowered from 9% to 6%, with a complete phase-out planned by January 1, 2027. This policy shift is a proactive measure by China to address escalating global trade tensions and assuage concerns from international trade partners, particularly the European Union, regarding a surge in Chinese exports. Economists note that Beijing is taking voluntary steps to rein in exports of certain goods, aiming to manage its trade imbalances and mitigate accusations of unfair trade practices. Beyond international relations, the move also seeks to tackle domestic issues such as industrial overcapacity, especially in sectors like solar manufacturing, which has been grappling with intense price competition. Removing these rebates is expected to increase export costs, potentially forcing less competitive companies reliant on overseas sales out of the market and helping to alleviate supply gluts. While previous adjustments to export tax rebates were made in late 2024 for other products, this latest announcement specifies new categories and timelines, underscoring a deliberate and phased approach to recalibrating China's trade strategy. The changes are expected to have considerable implications for global supply chains and trade dynamics, with potential impacts on various industries worldwide, including those in India.