India plans retaliatory duties against US auto tariffs at WTO amid trade deal talks

India has fired back at Washington’s steep auto tariffs, proposing to impose retaliatory duties on US goods under World Trade Organisation (WTO) rules — a sharp escalation in trade tensions that could impact nearly $3 billion worth of exports.

“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 WTO notification circulated at India’s request.

India has notified the WTO’s Council for Trade in Goods of its proposed suspension of concessions and other obligations under specific WTO provisions.

“This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India,” it said.

On March 26 this year, the US adopted a safeguard measure imposing a 25 per cent ad valorem tariff on imports of passenger vehicles and light trucks, as well as certain automobile parts from India.

These measures apply from May 3, 2025, as regards automobile parts, and are set to continue indefinitely.

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 inconsistent with the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO 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,” the WTO notification added.

The safeguard measures would affect \$2.895 billion in annual imports into the United States of the relevant products originating in India, resulting in duty collections of \$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,” it said.

To ensure the effective exercise of its right to suspend substantially equivalent concessions or other obligations, the WTO noted that India has reserved its right to adjust both the list of targeted products and the tariff rates.

“India reserves the right to withdraw, modify, supplement or replace this notification, and/or make a further notification or notifications as and when required,” it added.

The development comes as India and the US are negotiating an interim trade agreement to boost bilateral trade ties. Just last month, India took similar measures in response to US tariffs on steel and aluminium.

Meanwhile, US President Donald Trump said his administration would start sending letters to other countries, notifying them of the tariff rates they would face from Friday. He said he wanted to inform countries of the tariffs required to maintain trade with the US, rather than negotiate separate deals with each one.

The tariff letters would go out to roughly 10 countries per day beginning Friday, the report added. This announcement comes ahead of the July 9 deadline set by the Trump administration to secure deals after announcing reciprocal tariffs. A 90-day pause had been granted to allow room for negotiations, during which the tariff rate was temporarily lowered to 10 per cent for most countries.