India proposes WTO-sanctioned tariffs on US over auto duties

On March 26, the US adopted a safeguard measure in the form of a tariff increase of 25 per cent ad valorem on imports of passenger vehicles and light trucks, and on certain automobile parts from India

New Delhi: India on Friday proposed imposing retaliatory duties under the WTO (World Trade Organisation) norms against the US over American tariffs on automobile sector in the name of safeguard measures.

“The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the United States,” according to a notification of the WTO being circulated at the request of India.

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India has notified the WTO’s Council for Trade in Goods of its proposed suspension of concessions and other obligations under certain WTO provisions. “This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India,” it said.

On March 26 this year, the US adopted a safeguard measure in the form of a tariff increase of 25 per cent ad valorem on imports of passenger vehicles and light trucks, and on certain automobile parts from India.

These measures apply from May 3, 2025 as regards automobile parts, and for an unlimited duration. The measures have not been notified by the United States to the WTO, but are, in essence, safeguard measures.

India has maintained that the measures taken by the United States are not consistent with the GATT (General Agreement on Trade and Tariff) 1994 and the agreement on Safeguards.
As consultations sought by India on these tariffs have not taken place, “India reserves the right to suspend concessions or other obligations”, the WTO notification added.

The safeguard measures would affect USD 2,895 million imports annually into the United States of the relevant products originating in India, on which the duty collection would be USD 723.75 million.

“Accordingly, India’s proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the United States,” it said. To ensure the effective exercise of its right to suspend substantially equivalent concessions or other obligations, the multinational body said, India has reserved its right to adjust the products as well as the tariff rates.

“India reserves the right to withdraw, modify, supplement or replace this notification,and/or make a further notification or notifications as and when required,” it added. The development is important as India and the US are actively negotiating an interim trade agreement to boost trade ties.

India has last month taken similar measures against the US tariffs on steel and aluminium.