New Delhi: In a double blow to the US business diplomacy, the second attempt of the new Delhi refused to start consultations in the World Trade Organization within a few days – this time over steep cars and cars.
Washington rejected India’s notifications of WTO consultations regarding the US tariff to automatic components and claimed that automotive duties were stored for national security and therefore are not subject to multilateral business rules, according to WTO paper.
“However, we are open to discuss this or any other India problem. There would be no discussions on tariffs in accordance with the warranty agreement and would not be without prejudice that tariffs were not protected,” Washington said in his response to the business body.
This indicates that the US is open to a 25% tariff on car components or any other India problem, such as 50% of the steel and aluminum tariff.
India filed a notification with the WTO on these two questions. When the US rejected a long -waiting case for steel and aluminum a few days ago, it did not make any such statement or submission that a discussion was open.
The new Delhi said it reserves the right to store retaliation on US automotive tariffs, said an official of the Ministry of Trade in India and demanded anonymity.
Although 25% of the US tariff on automotive components is expected to have a minimum impact on the Indian automotive sector, the latest development is underlined by Washington’s access in Washington or is in negotiations with the new Delhi on the milestone of the bilateral trade agreement.
India seeks to complete the first trade agreement before the 90 -day pause of US President Donald Trump on the US mutual tariff on July 8. At the same time, India increases efforts in WTO’s rights.
The latest rejection of the new Delhi case in WTO reflects its response to the Indian challenge against American steel and aluminum tariffs. Indian exporters of cars, especially in automotive components and electric vehicles, are afraid of limited access to the US market, as well as expanding capacity and administering global supply chains.
“The recent storage of 25% of the US tariff on Indian car exports is a potential challenge for the Indian automotive industry, especially for components and exporter manufacturers,” said Saket Mehra, partner and automotive industry, Thornton Bharat. “This development can affect business flows and price structures, especially for companies with a significant exposure to the US market.”
The Ministry of Trade did not immediately answer Mint questions.
Between jurisdiction
In response to the request of India to WTO consultations on June 3 in the US, the US, in its submission of the WTO Committee for Warranty on 10.
The US added that, as these tariffs fall into the basic security exemption in Article XXI General Agreement on Faculty and Trade (Gatt) of 1994 and are not protected by measures, consultations under Article 123 of the warranty agreement are not subject to measures.
“These measures are not measures,” said the US, adding that India’s request “is not based on warranty agreement”.
“However, we are open to discuss this or any other India problem. There would be no discussions on tariffs on the basis of a guarantee agreement and would not be protected without prejudices that tariffs were not protected by measures,” the US added.
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However, India claimed that these obligations act as de facto protection of measures and require WTO supervision.
Tarifs for car components that came into force on May 3, followed by the US announcement on March 26 and asking for an unlimited duration. The attitude in the new Delhi is that such measures limiting trade should not bypass the multilateral framework only by induction of national security.
Another official of the Indian government acknowledged the American position, but said the impact on market access and predictability was undeniable. “Whether it is called protective measures or security actions, the result is the same – our exporters face a barrier,” said this official, and also spoke on the condition of anonymity.
“India raised concerns about the World Trade Organization (WTO), referring to procedural problems with the implementation of the tariff. If the US does not deal with India’s announcement, this matter could continue the formal processing process according to WTO mechanisms,” said Mehra of Thornton Grant Bharat.
Principle
Indian government officials claim that the US dispute over cars has less to do with the volume of trade and is more of a principle of non -discrimination and the risk of uncontrolled protectionism.
Business analysts added that the latest episodes of India and the US also emphasize the limited role of WTO in disputes concerning the exceptions of national security and the growing trend between the main economies that such provisions would cause to protect strategic industries.
According to the Ministry of the Ministry of Trade India to the US in 2024, the export of a car to the US in 2024 was only $ 8.9 million. It was a fraction of the total export of an Indian car, which last year was $ 6.98 billion, indicating that the new US tariffs would have little or no influence on the Indian expansion branch of the export of cars, said Ajay Srivastava, co -founder of a global business research initiative (GTRi).
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However, Srivastava warned that if India decides to reduce tariffs on the import of passenger cars to calm the US, it would be counterproductive. Srivastava referred to the experience of Australia at the end of the 80s when its car industry collapsed after the country reduced its automatic tariff from 45% to 5%.
Last month, the US Commercial Court declared Trump’s mutual mutual tariffs to be illegal, which made calls from experts in India to New Delhi to re -consider their approach to ongoing business negotiations with Washington.
The impact of US automotive rates on Indian truck exports is expected to be marginal. India exported to the US in 2024 trucks worth $ 12.5 million, which represents only 0.89% of its global export of trucks.
However, the Indian auto -parts industry excels as the oldest category of the recent American tariffs, with India exporting components worth $ 2.2 billion, which, according to the Ministry of Trade in the Ministry of Commerce, to develop 29.1% of Indian parts.
India-USA business agreement
India and the US are dealing with negotiations on a comprehensive trade agreement, with a common goal to increase bilateral trade from the current $ 191 billion to $ 500 billion by 2030.
In this context, cars can be solved as part of wider trading discussions, said Mehra of Thornton Bharat.
“In the future, India may consider a combination of diplomatic engagement, legal procedure through WTO and domestic political measures to support affected industries. These steps could help mitigate the impact of the tariff while maintaining momentum in a wider business relationship,” Mehra said.
“It is interesting that while Vietnam had previously faced car imports ranging from 45 to 64%, in March 2025 they were within a bilateral store and supplied for automatic goods,” he added.
“Despite the higher tariff on Indian car exports, India can maintain a competitive advantage in some segments if other countries face higher duties for specific car products or lack the extent and diversity of the Indian automotive industry,” Mehra said.
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