India Challenges US Auto Tariffs: A Move Towards Trade Negotiations

India Seeks WTO Consultations Over US Tariffs

On Tuesday, India initiated discussions with the United States through the World Trade Organization (WTO) regarding the recent tariffs imposed on auto components. This action follows India's declaration of its right to impose countermeasures on specific American goods due to the US tariffs on steel and aluminum.

The US implemented a 25% tariff on imports of passenger vehicles, light trucks, and certain auto parts from India, effective March 26, 2025, as per India's communication to the WTO. This tariff on auto parts is set to remain in place indefinitely starting May 3, 2025.

India argues that this tariff constitutes a safeguard measure under the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Safeguards, aimed at shielding the US domestic market from rising imports.

Furthermore, India contends that the US did not properly notify the WTO Committee regarding this safeguard measure, as required by the Agreement on Safeguards.

As a nation significantly impacted by these tariffs, India is requesting consultations with the US to discuss the implications of this measure. India is eager to receive a timely response from the US to arrange a suitable date and location for these discussions.

India maintains all rights under the WTO framework.

In the previous year, the US imported $89 billion worth of auto parts globally, with Mexico contributing $36 billion, China $10.1 billion, and India only $2.2 billion.

Regarding passenger vehicles, India exported a mere $8.9 million worth to the US in 2024, representing just 0.13% of its total exports of $6.98 billion.

On the matter of steel and aluminum tariffs, the US has dismissed India's assertion that these tariffs qualify as safeguard measures under WTO regulations.

On May 9, India notified the WTO of its intention to impose retaliatory tariffs on certain US products in response to the US's steel and aluminum tariffs. While the specific products have not been disclosed, India previously imposed retaliatory tariffs on 28 US items in 2019, including almonds, apples, and chemicals.

Economic think tank GTRI has commented that the US's justification for these tariffs based on national security grounds renders India's proposed countermeasures legally 'invalid'.