India-US Trade Deal: Understanding India’s WTO Rights on Auto Tariffs

India’s Right to Impose Retaliatory Duties

India has officially stated its right to impose retaliatory duties on the United States. This comes after the US placed a 25% tariff on Indian auto parts imports. However, an official clarified that this move won’t affect the ongoing trade deal talks between the two countries. It’s a standard procedure under the WTO agreement on safeguards.

WTO Rules and Safeguard Measures

India made this move under World Trade Organisation (WTO) rules. India sees the US tariff action as a “safeguard measure.” A WTO notification stated that India could raise tariffs on selected American goods in response.

An official explained, “The WTO notification is a crucial step to keep India’s rights. It follows the safeguard agreement rules. It doesn’t affect the ongoing talks or negotiations for the India-US trade deal.”

US Tariff and India’s Response

The US imposed the tariff on March 26, 2025, under Section 232 of the Trade Expansion Act, 1974. India had asked for talks under the WTO’s Agreement on Safeguards. With the 30-day talk period over, India has taken the next step.

“India saw this as a safeguard measure and asked for WTO talks earlier. Now, after the 30-day talk period, India has stated its right to suspend concessions on equivalent US exports to India. This is a response to the 25% tariff the US imposed on Indian auto parts exports,” the official said.

Ongoing Trade Deal Talks

India and the US aim to finish the first phase of the trade deal by September or October. The goal is to boost trade to $500 billion by 2030 from the current $191 billion.

Before that, both sides are discussing an interim trade agreement. This is expected before July 9, the deadline for the end of the 90-day suspension of the so-called Trump tariffs.

Uncertainty and National Interest

US President Donald Trump has said he signed letters about new import duties for 10-12 countries. These letters will be sent on Monday.

However, it’s unclear if the interim deal will be announced before the July 9 deadline.

Commerce Minister Piyush Goyal said India won’t rush into any deal just to meet a deadline. He stated that any deal with the US will be accepted only when it’s fully finalized, properly concluded, and in the national interest.

He added that free trade agreements (FTAs) are possible only when both nations benefit and are in a win-win situation.

Key Points to Remember

• India has stated its right to impose retaliatory duties on the US.
• This move is a standard procedure under WTO rules.
• It doesn’t affect the ongoing trade deal talks between India and the US.
• The US imposed a 25% tariff on Indian auto parts imports.
• India and the US aim to boost trade to $500 billion by 2030.
• Both sides are discussing an interim trade agreement before July 9.
• India’s Commerce Minister stated that any deal will be accepted only if it’s in the national interest.

WTO’s Agreement on Safeguards

India and the US are both part of the WTO’s Agreement on Safeguards. This agreement allows any member country to withdraw or suspend tariff concessions if another member imposes safeguard measures on its imports.