India proposes retaliatory duties against US's auto tariffs at WTO

India has proposed suspending trade concessions worth $723.75 mn in response to US safeguard tariffs on autos, even as an interim trade agreement nears finalisation

India on Friday told the World Trade Organisation (WTO) that it plans to levy retaliatory duties on select US products in response to 25 per cent tariff hikes imposed by Washington on automobiles and certain auto parts, a move which comes at a crucial juncture when both the nations appeared close to sealing an interim trade agreement. 

“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. Without prejudice to the effective exercise of its right to suspend substantially equivalent obligations referred to in Article 8.2, AoS, India reserves its right to suspend concessions or other obligations after the expiration of thirty days from the date of this notification,” according to a WTO notification. 

From May 3, the US adopted a “safeguard 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. India said that the measures have not been notified by the US. They are also not consistent with the global trade rules. India further said that the safeguard measures will impact $2.895 billion imports of Indian-origin auto products each year, with duties totalling $723.75 million.   

Therefore, India plans to suspend trade concessions of equivalent value in response. 

Last month, India had submitted a formal notification to the WTO under the Agreement on Safeguards, informing the multilateral trade body of its intention to suspend concessions under the agreement in response to the tariffs imposed by the US on steel, aluminium, and their derivative products.