India-US trade deal: India says reserves WTO right to hit back at US on auto tariffs; adds move won't impact bilateral agreement talks

India has officially reserved its right to impose retaliatory duties on the United States for placing a 25 per cent tariff on imports of Indian auto parts. However, an official has clarified that this step will not impact ongoing talks for a trade deal between the two countries, and is a procedural move under the WTO agreement on safeguards.

On Friday, India proposed the move under World Trade Organisation (WTO) rules, treating the US tariff action as a “safeguard measure.” A notification circulated at the WTO stated that India could raise tariffs on selected American goods in response.


An official was quoted as saying in a PTI report, "The notification in WTO is an essential step to reserve India's right, in accordance with the provisions of the agreement on safeguard and does not prejudice ongoing discussions, deliberations, negotiations for finalizing tranche one or subsequent tranches of India-US bilateral trade agreement (BTA) in any way."

The US had imposed the tariff on 26 March 2025 under Section 232 of the Trade Expansion Act, 1974. In response, India had earlier requested consultations under the WTO’s Agreement on Safeguards. With the 30-day consultation period now over, India has taken the next procedural step.

"India treated it as a safeguard measure and gave a notice for consultation under the WTO agreement earlier. Now, as per the provisions of that agreement, after completion of 30 days period for consultation, as a next step, India has notified that it is reserving its right to suspend concession on equivalent US exports to India as a response to enhanced tariff of 25 per cent imposed by the US on Indian exports of auto components," the official said.

Talks between India and the US aim to conclude the first phase of the BTA by September or October, with the goal of increasing bilateral trade to $500 billion by 2030 from the current $191 billion.

Before that, both sides are also discussing an interim trade agreement, expected before 9 July, the deadline marking the end of the 90-day suspension period of the so-called Trump tariffs.

US President Donald Trump has said he has signed letters informing 10–12 countries about new import duties, and these letters will be sent on Monday.

However, sources indicate that there is uncertainty around whether the interim deal will be announced between the two nations before the July 9 deadline.

Earlier on Friday, commerce minister Piyush Goyal said that India will not rush into any deal just to meet a deadline. He said that any deal will be accepted with the US only when it is completely finalized, properly concluded and is in the national interest.

He further added that FTAs or free trade agreements are possible only when both the nations are benefitted and are in a win-win agreement.

India and the US are both signatories to the WTO’s Agreement on Safeguards, which allows any member country to withdraw or suspend tariff concessions if another member imposes safeguard measures on its imports.
Stay informed with the latest business news, updates on bank holidays and public holidays.

AI Masterclass for Students. Upskill Young Ones Today!– Join Now