India's Bold Move: Retaliatory Tariffs Against US Auto Sector Unveiled
India's Response to US Tariffs
New Delhi: On Friday, India announced its intention to implement retaliatory tariffs under World Trade Organization (WTO) guidelines in response to the United States' tariffs on the automobile industry, which are framed as safeguard measures.
According to a notification circulated by India, the proposed actions would involve raising tariffs on specific products imported from the US.
India has formally informed the WTO's Council for Trade in Goods about its plans to suspend certain concessions and obligations as per WTO regulations.
This notification is linked to the safeguard measures imposed by the US on automobile parts imported from India.
On March 26, the US introduced a safeguard measure that includes a 25% tariff increase on imports of passenger vehicles, light trucks, and certain automobile components from India.
These tariffs will take effect on May 3, 2025, specifically for automobile parts, and will remain in place indefinitely.
Although the US has not officially notified the WTO about these measures, they are fundamentally safeguard actions.
India argues that the US measures violate the General Agreement on Tariffs and Trade (GATT) 1994 and the Safeguards Agreement.
Since consultations requested by India regarding these tariffs have not occurred, India has stated that it reserves the right to suspend concessions or other obligations.
The safeguard measures are projected to impact approximately USD 2.895 billion in annual imports to the US from India, resulting in an estimated duty collection of USD 723.75 million.
Consequently, India's proposed suspension of concessions would lead to a similar amount of duties collected from US-origin products.
This development is significant as both India and the US are currently engaged in negotiations for an interim trade agreement aimed at enhancing trade relations.
Last month, India implemented comparable measures in response to US tariffs on steel and aluminum.