India proposes retaliatory duties against US over auto tariffs at WTO

India proposes retaliatory duties against US over auto tariffs

India has proposed imposing retaliatory duties under WTO (World Trade Organisation) norms over American tariffs of 25-percent on automobile parts in the name of safeguard measures.

"This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India," the notification dated July 3 said.

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.

It added that the safeguard measures would affect $2895 million of Indian exports annually into the United States, on which the duty collection would be $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, India said.

On March 26 this year, the US adopted a safeguard measure in the form of a tariff increase of 25 percent 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", it added.

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

The development is important as India and the US have been negotiating an interim deal to boost trade ties. Both sides aim to agree to a scaled-down version before July 9.

Moneycontrol had earlier reported that the United States is reluctant to exempt India from sectoral tariffs on steel, aluminium and certain automobiles at least in the mini-trade deal.

US President Donald Trump raised the tariff on steel and aluminium imports from 25 percent to 50 percent on June 4.