By Anjali Sharma
WASHINGTON – India on Sunday has formally proposed retaliatory tariffs on select US products under World Trade Organization rules, in response to America’s recent hike in import duties on automobiles and auto parts originating from India.
India in a notification to the WTO said the U.S. safeguard measures a 25% ad valorem tariff on passenger vehicles, light trucks, and certain automobile components — would affect $2.895 billion worth of Indian exports annually.
The corresponding duty collection by the U.S. is estimated at $723.75 million.
India stated that the proposed suspension of concessions or other obligations will be in the form of an increase in tariffs on selected products from the U.S., matching the value of the affected trade.
“India’s proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the United States,” it said.
U.S. measures, adopted on March 26 and effective from May 3, 2025, have not been notified to the WTO.
India maintains that the actions are inconsistent with the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards.
India requested consultations with the U.S. over the tariff hike, but no such discussions have taken place.
India has now reserved the right to suspend concessions if consultations do not materialize.
India is proposing retaliatory duties under WTO norms at the second time.
New Delhi sought to impose similar tariffs in response to U.S. safeguard duties on steel and aluminium which it said impacted $7.6 billion worth of Indian exports.
According to trade data, the U.S. imported $89 billion worth of auto parts in 2024, of which India’s share was just $2.2 billion far behind Mexico and China. Nonetheless, India views the tariffs as unjustified and protectionist.
The development came at a critical juncture, as both nations are in the midst of negotiations for a bilateral trade agreement.
A deal is expected ahead of the July 9 deadline, when a 90-day pause on U.S. retaliatory tariffs expires.
“This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India,” India noted in its submission to the WTO.
The outcome of this dispute could influence the trajectory of India-U.S. trade relations, especially amid efforts to deepen strategic and economic ties between the two countries.
