India tells WTO it may impose retaliatory tariffs worth $724 million on U.S. imports

The Indian government has notified the World Trade Organization (WTO) of its proposal to levy retaliatory tariffs amounting to nearly $724 million on the U.S. in response to that country’s increased tariffs on the import of particular automobiles and parts from India.

The move comes at a time when India and the U.S. are in advanced stages of finalising an initial mini-trade deal. India’s negotiation team, led by Special Secretary in the Ministry of Commerce and Industry Rajesh Agarwal, returned to India from the U.S. on Monday.  

Also read: Trump says ‘very big’ trade deal coming up with India

The U.S, on March 26, 2025, imposed a tariff increase of 25% ad valorem on passenger vehicles, light trucks, and certain automobile parts originating in India. 

‘Violates WTO pacts’

In a communication to the WTO dated July 3, India said that even though the U.S.’ measures had not been notified to the WTO, they were in essence safeguard measures. It added that India’s position on the matter was that the U.S. tariffs were not in accordance with the General Agreement on Tariffs and Trade 1994, the agreement at the core of the WTO, and the Agreement on Safeguards (AoS). 

“As consultations provided for under Article 12.3, AoS have not taken place, India reserves the right to suspend concessions or other obligations under Article 8, AoS that are substantially equivalent to the adverse effects of the measure to India’s trade,” India said in its communication.

In other words, as the U.S. had not conducted consultations with India over the issue, India reserves the right to suspend concessions provided to the U.S. equalling the amount that the U.S. tariffs would impact India’s exports to the U.S. 

“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,” India said. 

It added that the U.S.’ measures would affect $2,895 million worth of imports from India annually, on which the duty collection would be $723.75 million. “Accordingly, India’s proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the United States,” India said.

This isn’t the first time this year India has informed the WTO of its proposal to retaliate against U.S. tariffs. The Hindu reported in May that India had issued a similar notification to the WTO regarding the U.S. tariffs on steel and aluminium. The retaliation on those, if imposed, would amount to $1.91 billion.