
Date: July 9, 2025
By: Bharat Global Time Business Desk
Delhi Strikes Back: Trade Tensions Rise Over US Tariff Hike
In a strong response to the United States’ decision to increase tariffs on foreign-made electric vehicles and automotive parts, the Indian government is preparing to impose retaliatory import duties on a range of American automobiles and components.
Officials from the Ministry of Commerce and Industry confirmed that the move is intended to protect Indian economic interests and ensure reciprocal treatment in global trade.
What Triggered This Move?
Last month, the Biden administration hiked tariffs on imported electric vehicles (EVs), batteries, and select auto parts—ostensibly to protect American manufacturing and counter China’s EV dominance.
However, these measures have hit Indian automakers and suppliers, especially firms that export components to US-based companies or partner in joint R&D efforts.
India’s proposed response includes:
- 20–35% additional tariffs on imported US luxury vehicles
- Increased duties on electric vehicle parts and semiconductors
- Possible restrictions on procurement contracts involving US auto tech firms
Economic Fallout & Trade Diplomacy
Trade experts warn that this escalating tariff battle could affect:
- Bilateral trade worth over $120 billion
- US-India energy and auto-tech partnerships
- India’s ambitions in EV battery supply chains
India’s Commerce Minister stated:
“We value our partnership with the United States, but we cannot allow Indian manufacturers and exporters to be disadvantaged. Our actions will be calibrated, lawful under WTO, and in national interest.”
Impact on the Indian Auto Sector
Indian companies like Tata Motors, Mahindra Electric, and Sona Comstar—which are expanding global operations—could gain domestic protection but also face ripple effects in global supply chains.
Meanwhile, American companies such as Tesla, Ford, and Harley-Davidson may see reduced market access or increased costs in India.
Next Steps: Dialogue or Decoupling?
There are ongoing backchannel talks between Delhi and Washington to diffuse tensions. Diplomatic sources say a bilateral working group may be announced to resolve trade disputes before the upcoming G20 summit in Brazil.
However, if no agreement is reached, both nations may resort to WTO arbitration or further retaliatory steps.
Bottom Line
India’s decision to strike back with retaliatory tariffs marks a serious turn in global trade dynamics. As the world witnesses rising protectionism from the US, nations like India are no longer hesitating to defend their economic turf.
India vs USA: Auto Tariff War Ignites
Elements:
- Indian and US flags clashing over a car symbol (like Tata vs Ford)
- Broken chain links (symbolizing trade disruptions)
- Tariff signboards showing “20% Duty Imposed”
- A red “Trade War” stamp overlay