India Challenges 25% US Tariffs On Auto Parts Through World Trade Organization Filing

New Delhi has escalated its trade dispute with Washington by filing a formal complaint with the World Trade Organization (WTO) over recently imposed US tariffs on automotive imports. Notably, this is a significant shift in India's diplomatic approach toward US trade policies, says a report by Business Standard.

The complaint, submitted on June 2, contests the 25 per cent tariffs that the US implemented on passenger cars, light commercial vehicles, and selected automotive components. Indian trade officials argue these measures represent safeguard actions designed to shield American manufacturers from what they perceive as excessive foreign competition, the report added.

According to the filing, these trade restrictions took effect on May 3, 2025, but were implemented without the mandatory advance notice to the WTO's Safeguards Committee, potentially violating international trade regulations under Article 12.1(c) of the Safeguards Agreement.

India Demands Immediate Consultations

The complaint invokes Article 12.3 of the Safeguards Agreement, requesting formal discussions to evaluate the legitimacy of America's trade actions. 

Indian officials have emphasised their nation's substantial commercial interests in the impacted automotive sectors and urged Washington to promptly schedule consultation meetings.

Significantly, the filing includes a formal reservation of India's right to impose retaliatory measures should the mandatory 30-day consultation period fail to produce a satisfactory resolution.

Growing Trade Pressure

This WTO challenge represents a notable departure from India's previously cautious approach to US trade relations. Despite being among the first nations to engage with the current American administration following the announcement of "Liberation Day" tariffs, New Delhi had previously avoided direct confrontation, preferring behind-the-scenes diplomatic engagement.

The country had previously indicated willingness to respond proportionally to US trade actions, particularly regarding metal import restrictions.

Critical Timing Of WTO Complaint

The WTO complaint arrives during a key moment in US-India commercial relations, as negotiators from both countries work toward finalising a preliminary trade agreement before July. This deadline coincides with the expiration of a 90-day moratorium on additional tariff implementations.

The filing also corresponds with a scheduled visit by the US trade representatives to India on June 5-6, focused on addressing broader tariff concerns, including recently doubled duties on steel and aluminium products.

What Legal Framework Says

India's submission contends that if American measures qualify as safeguard actions, they must comply with specific procedural requirements established under WTO guidelines. Should negotiations fail, international trade rules permit India to suspend equivalent trade concessions through its own retaliatory duties.

WTO regulations explicitly authorise member nations to impose compensatory measures when consultation processes fail to achieve settlement agreements.