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India’s decision to reserve its rights to impose retaliatory duties on the US over imposition of tariffs on auto parts is a procedural move under the WTO agreement on safeguards and it will not affect ongoing negotiations on the proposed trade pact between the two countries, an official said.
Illustration: Dado Ruvic/Reuters
India on Friday proposed imposing retaliatory duties under the WTO (World Trade Organisation) norms against the US over American tariffs on imports of the country’s auto parts in the name of safeguard measures.
The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the US, according to a notification of the WTO being circulated at the request of India.
“The notification in WTO is an essential step to reserve India’s right, in accordance with the provisions of the agreement on safeguard and does not prejudice ongoing discussions, deliberations, negotiations for finalizing tranche one or subsequent tranches of India-US bilateral trade agreement (BTA) in any way,” the official told PTI.
The two countries have aimed to conclude the first phase of the BTA by fall (September-October) this year.
The agreement is aimed at more than doubling bilateral trade to USD 500 billion by 2030 from the current $191 billion.
Both India and the US are signatories to the Agreement on Safeguard at the WTO which empowers a WTO Member to suspend its tariff concessions to another member who introduces safeguard measures on its imports.
On March 26, 2025, the US announced a 25 per cent ad valorem tariff on the import of automobiles and on certain automobile parts, including, from India under Section 232 of the Trade Expansion Act, 1974.
“India treated it as a safeguard measure and gave a notice for consultation under the WTO agreement earlier. Now, as per the provisions of that agreement, after completion of 30 days period for consultation, as a next step, India has notified that it is reserving its right to suspend concession on equivalent US exports to India as a response to enhanced tariff of 25 per cent imposed by the US on Indian exports of auto components,” the official said.
Before the first phase, India and the US are negotiating to finalise an interim trade agreement before July 9, which marks the end of the 90-day suspension period of the Trump tariffs imposed on dozens of countries including India.
US President Donald Trump on Friday reportedly stated that he has signed tariff letters to 10-12 countries to inform them about import duties to be levied on various products, and these would be sent on Monday.
Meanwhile, sources have stated that there are uncertainties over the announcement of the interim trade agreement between India and the US before July 9.
India does not enter into any trade agreement based on deadlines and will accept the proposed trade deal with the US only when it is fully finalised, properly concluded and in the national interest, Commerce Minister Piyush Goyal has said on Friday.
FTAs are possible only when both sides get benefitted and it should be a win-win agreement, he has said.
