India has formally proposed retaliatory tariffs totaling $724 million at the World Trade Organization. This move is a direct response to the U.S.’s 25% safeguard tariffs on passenger vehicles, light trucks, and auto parts sourced from India, which impact $2.89 billion worth of Indian exports annually
Under WTO rules, India gains the legal right to suspend concessions or obligations equivalent to the financial damage caused by the U.S. tariffs. Although it hasn’t announced specific duty percentages or affected products, the proposal sets a 30-day window before implementation
📉 What Led to This?
- In May 2025, the U.S. triggered a 25% tariff on Indian vehicles and parts, citing national security concerns involving supply chain dependencies.
- The tariff is projected to reduce India’s automotive sector exports by nearly $2.9 billion annually.
- India has already launched a formal challenge, including this retaliatory notification under WTO safeguard mechanisms
🌍 Global Context
- This follows India’s earlier WTO notice responding to U.S. steel and aluminium tariffs—though India did not enforce those duties after consulting its industries Economictimes
- The move reflects broader global trade friction, as countries increasingly turn to WTO rules to counter unilateral tariffs.
⚠️ Implications & Stakes
- Negotiation leverage: By declaring a formal WTO response, India strengthens its hand in ongoing U.S.–India trade talks, especially ahead of a July 9 deadline to avoid broader tariff hikes
- Trade retaliation: The U.S. may legally push back if it disputes India’s entitlement to the $724 million in countermeasures.
- Economic impact: A retaliatory tariff could disrupt global auto supply chains and challenge U.S. exporters of vehicle parts.
🔮 What’s Next?
- Review by WTO: The WTO will assess whether India’s notified figure aligns with rules and may convene arbitration.
- Temporary delay window: India can only act after the 30-day consultation window ends—allowing time for negotiation or settlement.
- Possibility of resolution: A deal may be struck to resolve both U.S. tariffs and India’s planned retaliation within the window.
✅ Bottom Line
With this WTO notice, India has taken a calculated step toward imposing $724 million in retaliatory tariffs against U.S. imports. The move applies internationally agreed trade law to counteract U.S. auto‑tariffs and adds leverage to ongoing trade talks. Crucially, any escalation will depend on WTO rulings and high-stakes diplomacy ahead of the July 9 deadline.
