Overview

• The US formally rejected India’s request for WTO consultations on June 10, arguing that its 25% auto tariffs fall under the Article XXI national security exception rather than safeguard measures.
• India initiated the WTO process on June 3 after the US imposed tariffs on vehicles and auto parts on May 3, claiming the duties operate as de facto safeguards requiring multilateral oversight.
• New Delhi has reserved the right to impose retaliatory duties on select US products in response to American levies on steel, aluminium and auto components.
• India’s auto parts sector faces significant exposure, with $2.2 billion of components shipped to the US in 2024, representing nearly 30% of its global auto parts exports.
• The dispute unfolds while India and the US negotiate a Bilateral Trade Agreement aimed at boosting two-way trade from $191 billion today to $500 billion by 2030.