New Delhi: India on Tuesday sought consultations with the US under the World Trade Organisation’s safeguard agreement over American tariffs on auto components.
This move comes shortly after India reserved the right to impose retaliatory duties on select US products in response to American tariffs on steel and aluminium.
On March 26, 2025, the US adopted a measure in the form of a tariff increase of 25 per cent ad valorem on imports of passenger vehicles and light trucks, and on certain automobile parts originating in or from India, a communication sent by India to the World Trade Organisation (WTO) said.
The measure on automobile parts applies from May 3, 2025 and for an unlimited duration.
“India considers that the measure, in its design and effect, constitutes a safeguard measure within the meaning of…. GATT (General Agreement on Trade and Tariff) 1994 and the Agreement on Safeguards, as it is intended to protect the US domestic industry from increased imports,” it said.
It added that the United States failed to notify the WTO Committee on safeguards under a provision of the Agreement on Safeguards (AoS) on taking a decision to apply the safeguard measure.
“Accordingly, as an affected Member with significant export interest to the United States in the products concerned, India requests consultations with the United States,” it said.
In the consultations, India would like to exchange views on the measure.
“India looks forward to receiving a prompt reply to this request from the United States and to setting a mutually convenient date and venue for the… consultations,” it said.
India reserves all its rights under the agreement establishing the WTO.
The US imported USD 89 billion worth of auto parts globally last year, with Mexico accounting for USD 36 billion, China for USD 10.1 billion, and India for just USD 2.2 billion.
In the case of passenger cars, India exported a modest USD 8.9 million worth of vehicles to the US in 2024, which is just 0.13 per cent of the country’s total exports of USD 6.98 billion.
On the issue of tariffs on steel and aluminium, the US has rejected India’s claim that American tariffs on steel and aluminium are safeguard measures under the WTO rules.
On May 9, India informed the WTO that it has reserved its right under WTO norms to impose retaliatory duties on certain American products over the US’ steel and aluminium tariffs.
The proposed suspension of concessions, which India has notified, could take the form of increased tariffs on selected US products. While India has not disclosed those items yet, in a similar move in 2019, it had imposed retaliatory tariffs on 28 US products, ranging from almonds and apples to chemicals.
Commenting on the move, economic think tank GTRI has said the US argument that the tariffs are imposed on national security grounds makes India’s proposed suspension of concessions or imposing retaliatory duties on certain American goods legally “invalid”.
PTI
