The United States has rejected India's request for consultations at the World Trade Organization (WTO) concerning tariffs imposed by the U.S. on automobiles and auto parts. This marks the second time within a week that the U.S. has turned down India's attempt to initiate WTO consultations, the first being over steel and aluminium duties.

Washington asserts that the tariffs in question, which include a 25% levy on auto components, were implemented on national security grounds. Consequently, the U.S. argues that these tariffs are not subject to multilateral trade rules under the WTO framework. According to a WTO paper, the U.S. maintains that any discussions regarding these tariffs would not fall under the Agreement on Safeguards and would be "without prejudice" to their stance that the tariffs aren't safeguard measures.

India, however, argues that these duties function as de facto safeguard measures, necessitating WTO oversight. New Delhi contends that trade-restrictive measures should not bypass the multilateral framework by simply invoking national security. India formally requested consultations with the U.S. under the WTO's Agreement on Safeguards, challenging the 25% ad valorem tariffs on certain automobile components and vehicles imported from India. India's communication to the WTO highlighted that the U.S. failed to notify the WTO Committee on Safeguards, allegedly violating procedural obligations under WTO rules. India views the U.S. measure as a safeguard intended to protect the domestic auto industry from increased imports.

Despite rejecting the formal consultation request, the U.S. has indicated a willingness to discuss the auto tariffs or any other issues, including the tariffs on steel and aluminium, with India.

This latest dispute occurs as India and the U.S. are engaged in intense negotiations to finalize a bilateral trade agreement (BTA). India is keen to finalize the first part of the trade deal before the U.S. President's 90-day pause on reciprocal tariffs ends on July 8th, potentially triggering additional tariffs on Indian exports to the U.S. if an agreement is not reached.

India has reserved its right to impose retaliatory duties on U.S. automobile tariffs, similar to its stance on the steel and aluminium dispute.