WTO retaliation rights on US tariffs won’t affect trade deal talks: Official
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New Delhi: India’s move to reserve its rights to impose retaliatory tariffs on the United States over new duties on auto parts is a procedural step under World Trade Organisation (WTO) rules and will not impact ongoing negotiations for a bilateral trade agreement (BTA), a senior official said on Friday.
On March 26, 2025, the US imposed a 25% ad valorem tariff on imports of automobiles and certain auto parts — including from India — under Section 232 of the Trade Expansion Act, 1974. India responded by treating the move as a safeguard measure and notified the WTO of its intent to initiate consultations, as permitted under the WTO’s Agreement on Safeguards.
Following the conclusion of the 30-day consultation period, India has now formally notified the WTO that it is reserving its right to suspend equivalent trade concessions on select US exports. This proposed suspension would come in the form of increased tariffs on specific American-origin products.
“The notification in WTO is an essential step to reserve India’s right, in accordance with the provisions of the Agreement on Safeguards, and does not prejudice ongoing discussions, deliberations, or negotiations related to the finalisation of tranche one or subsequent tranches of the India-US bilateral trade agreement,” the official said.
The move comes as India and the United States continue to work toward finalising the first phase of the BTA, which aims to double bilateral trade from the current USD 191 billion to USD 500 billion by 2030. Both nations are signatories to the WTO's safeguard rules, which allow retaliatory action if one member imposes protectionist measures.
In the lead-up to July 9 — which marks the end of the 90-day suspension period for tariffs previously imposed by the Trump administration — India and the US are trying to conclude an interim trade agreement. However, sources indicate uncertainty over its announcement before the deadline.
US President Donald Trump said on Friday that he had signed tariff letters to 10–12 countries regarding new duties on various products, and these would be dispatched on Monday.
Commerce Minister Piyush Goyal, meanwhile, clarified that India will not rush into any agreement based on deadlines. “India will accept a trade deal with the US only when it is fully finalised, properly concluded, and in the national interest,” Goyal said. He added that free trade agreements (FTAs) must offer mutual benefit and be based on a win-win approach.
With PTI inputs
