India Challenges US Automobile Tariffs at WTO

India contests the US’s 25% tariffs on imported cars with the WTO, saying they cause market disruptions and that notifications for the tariffs lacked proper procedure.

India has challenged the US at the World Trade Organization (WTO) for imposing an extra 25% duty on imports of cars and their parts. This means, starting May 3, 2025, providing passenger vehicles, light trucks and some auto parts to the US will come with tariffs which may stop India’s $6 billion annual exports of auto parts to the US.

India argued that the US should have informed the WTO Committee on Safeguards and therefore requested formal consultations, stating that the duties were a "safeguard measure." The US has explained these duties resulted from national security measures, rather than from a safeguard.

The objection is in response to an earlier disagreement over US tariffs on steel and aluminum. If that was how it developed, India decided to reserve its right to act against US goods because the US failed to discuss the matter.

The automobile sector concerns itself that the new tariffs may disrupt their supply lines and possibly reduce revenue, even if their trade of new vehicles is not strongly affected. Tata Motors’ UK-based Jaguar Land Rover is the only vehicle maker among Indian automakers at risk of notable exposure.

Both nations are working together on a bilateral trade agreement which is where the development comes from. India may agree to lower its import duties on auto parts (now between 10-15%) in the course of the negotiations.