‘No basis to seek…’: US disagrees to India asking for WTO consultations on auto tariffs; calls it ‘essential security exception’ | India Business News
The United States has informed the World Trade Organization (WTO) that India’s request for consultations regarding American tariffs on automobiles and auto components under the trade watchdog’s safeguard agreement was unfounded.The United States notified the WTO on Monday that the automotive tariffs were implemented under Section 232, a national security provision, and that the country continues to maintain these measures under the essential security exception within global trade regulations. US said it was “maintaining these actions pursuant to the essential security exception.”India had asked for consultations with the United States after the latter implemented a 25% ad valorem tariff increase on imports of passenger vehicles, light trucks, and specific automobile parts originating from India.The automotive components measure took effect from May 3, 2025, without any specified end date, according to an ET report.
US rejects India seeking WTO consultations
- India had raised concerns about the US’s failure to notify the WTO Committee regarding safeguard measures under the Agreement on Safeguards (AoS) provisions.
- Global auto parts imports to the US totalled $89 billion in the previous year, with Mexico supplying $36 billion, China $10.1 billion, and India contributing $2.2 billion.
- The United States has said that its actions were not taken under Section 201 of the Trade Act of 1974, which governs safeguard measures. The US added that consultations under the Agreement on Safeguards were not applicable as these were not safeguard measures.
- The US response mirrors its stance on India’s proposed retaliatory duties on 29 US products, including apples, almonds, pears, anti-freezing preparations, boric acid and specific iron and steel items. These were intended to counter US tariffs on steel and aluminium, which India reported would impact $7.6 billion of US imports.
These WTO discussions come amidst ongoing negotiations for a Bilateral Trade Agreement (BTA) between the two nations. US trade representatives visited New Delhi from June 4-10 for discussions regarding the trade pact.
