India Plans Retaliatory Tariffs Against US Over Auto Sector Duties

New Delhi, July 4 — India has formally proposed imposing retaliatory tariffs on select US goods under World Trade Organization (WTO) rules, following Washington’s imposition of safeguard duties on Indian automobile exports.

In a notification submitted to the WTO’s Council for Trade in Goods, India stated its intent to suspend certain trade concessions granted to the United States under the WTO framework. “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,” the notification said.

Background: US Tariffs on Indian Auto Exports

The US had introduced a 25% ad valorem tariff on imports of passenger vehicles, light trucks, and certain automobile parts from India as a safeguard measure. These duties came into effect on May 3, 2025, and are set for an unlimited duration.

India emphasised that these tariffs, though not formally notified to the WTO, qualify as safeguard measures under global trade rules. It also maintains that the US action violates provisions of the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Safeguards.

Impact and India’s Response

According to India’s WTO submission, the US safeguard duties affect $2.895 billion worth of annual automobile-related exports from India. The estimated annual duty collection from these imports stands at $723.75 million.

India has asserted that consultations requested under WTO dispute settlement procedures have not taken place. As a result, the country has reserved the right to suspend equivalent concessions by levying retaliatory tariffs on US-origin goods.

Trade Context: Interim Deal Talks Ongoing

This comes while India and the US are still in talks over an interim trade deal, an effort to iron out lingering differences and give their trade ties a much-needed boost. Last month, India took a similar retaliatory stance on US tariffs related to steel and aluminium. India’s move underlines its firm stance on defending domestic trade interests in the face of what it deems unilateral and WTO-inconsistent US trade measures.

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