India Proposes Retaliatory Duties Against US Auto Tariffs At WTO

Amid the ongoing US-India trade deal negotiations, New Delhi has proposed retaliatory tariffs against the United States for the latter's import levies on automobile products.

The proposal was made by India before the World Trade Organization.

India said it reserves the right to raise tariffs on auto components, and its safeguard measures would affect $2.89 billion worth imports annually into the US, on which India could collect duties of about $723.75 million.

India has said it reserves the right to impose the duties after 30 days.

On March 26, the US had adopted a safeguard measure in the form of a tariff increase of 25% on imports of passenger vehicles and light trucks, and on certain automobile parts originating in or from India, for an unlimited duration. This was part of the Trump's administration's broader attack on trading partners to even out "unfair" trade surpluses.

Notably, India had made a similar move at WTO against US' steel and aluminium duties on June 3. However, the 30-day period for that notice is over and India has not chosen to impose any duties so far.

Sources also said that India may raise the 12% safeguard duty it has so far applied on steel products if imports continue to rise.

"India’s WTO notification is a legal and strategic step, signaling its readiness to retaliate against the US safeguard duties on automobiles and parts. By invoking Article 8.2 of the Safeguards Agreement, India is asserting its rights under international trade rules," Ajay Srivastava, founder of think-tank Global Trade Research Initiative, said.

"However, whether India will follow through remains uncertain. In a similar case involving US steel tariffs, India held back. Given the sensitive timing of the India-US trade deal and broader geopolitical considerations, this may be more of a warning shot than a guaranteed action," he said.