India has sought consultations with the US at the World Trade Organisation (WTO) on tariff increase of 25 per cent on imports of passenger vehicles (PVs) and light trucks, and on certain automobile parts, stating that these were safeguard measures that should have been notified by the US to the multilateral trade body. This comes on the heels of India reserving its rights at the WTO to retaliate against US tariffs on steel and aluminium. India may raise the issue of tariffs on both steel and aluminium and automobiles, seeking a rollback, in the ongoing bilateral trade agreement (BTA) negotiations with the US, sources said. Discuss compensation In its latest submission at the WTO, India pointed out that 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 PVs and light trucks, and on certain automobile parts originating in India. 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 safeguard measure within the meaning of Article XIX of GATT 1994 and the Agreement on Safeguards (AoS), as it is intended to protect the US domestic industry from increased imports,” it said. While India’s export of cars and trucks to the US is low, that of its auto components to the country is significant and is estimated at around $6.8 billion in FY24. The US failed to notify the WTO Committee on Safeguards under Article 12.1(c) of the AoS on taking a decision to apply the safeguard measure. “As an affected member with significant export interest to the United States in the products concerned, India requests consultations with the country to exchange views on the measure and to meet the objectives set out in Article 8.1, AoS,” India submitted. This means that India wants to discuss compensation as Article 8.1 outlines the obligation of a member to compensate a trading partner for the application of a safeguard measure. This compensation requirement applies when a safeguard measure is imposed and causes, or threatens to cause, significant damage to the trading partner’s exports. Safeguard measures India had also sought consultations with the US when it applied 25 per cent import duties on steel and aluminium products on March 12, 2025. While the US argued that the sector-specific duties were applied on national security grounds, India maintained that these were essentially safeguard duties. When wrongfully applied, the affected WTO member can seek permission for retaliation. “The safeguard measures would affect $7.6 billion imports into the United States of the relevant products originating in India, on which the duty collection would be $1.91 billion,” India’s WTO submission noted. New Delhi proposed to suspend concessions on US goods of equivalent amount of duty at a later time. “Now that the US is set to double steel and aluminium tariffs to 50 per cent from 25 per cent, the duty collection on India’s exports of the items would have increased proportionately. It has to be seen if India gives a fresh submission on right for suspended concessions of a higher amount,” a source pointed out. Published on June 3, 2025