Amidst rising geopolitical tensions, the as soon as sacrosanct rules of worldwide buying and selling system are giving solution to a brand new actuality wherein unilateralism and weaponisation of commerce coverage underneath the guise of nationwide safety have turn out to be the brand new regular. The imposition of an extra 25% tariff on Indian imports by america, introduced on August 6, 2025, has sparked important concern inside worldwide commerce regulation circles. Approaching prime of a beforehand declared 25% levy underneath the so-called “reciprocal tariff” regime launched in July, 2025, america has successfully raised the cumulative tariff on a variety of Indian exports to 50%. The justification offered by the U.S. administration for this motion was India’s continued importation and resale of Russian oil. This raises essential authorized questions relating to the consistency of such commerce measures with obligations underneath the World Commerce Group (WTO) framework. This improvement requires an analytical engagement with core rules of the Normal Settlement on Tariffs and Commerce (GATT) 1994, together with non-discrimination, respect for sure tariffs, and the lawful invocation of nationwide safety exceptions.
On the coronary heart of the WTO authorized order lies the precept of non-discrimination, enshrined in Article I.1 of GATT 1994, which mandates Most Favoured Nation (MFN) therapy. Underneath this provision, any benefit granted by a WTO member to merchandise originating from one nation have to be prolonged instantly and unconditionally to love merchandise of all different WTO members. The U.S. measure, in focusing on India for punitive tariffs whereas different nations engaged in comparable conduct usually are not topic to equal tariff will increase, probably violates this cornerstone obligation. For example, credible experiences verify that China, the most important purchaser of Russian oil in 2024-25, has not been subjected to the same tariff escalation. Equally, Turkey, which maintains sturdy vitality commerce relations with Russia, faces tariffs capped at 15%, considerably decrease than India’s 50% burden. This differential therapy lacks a formally documented authorized foundation underneath U.S. commerce coverage and constitutes, at a minimal, a de facto denial of MFN therapy.
There are solely sure recognised exceptions to the MFN precept, particularly the Normal Exceptions underneath Article XX of GATT (which permits compromising obligations underneath the GATT within the curiosity of safety of public morales, human or flora and pure assets), preferential tariffs underneath Article XXIV of GATT (which permits preferential tariff for members of a Customs Union or Free Commerce Space) and the differential therapy allowed underneath the Enabling Clause. The WTO Appellate Physique’s jurisprudence, significantly in EC – Tariff Preferences (WT/DS246) is instructive on this context. In that case, the Appellate Physique held that any preferential therapy provided to a choose group of nations underneath the Generalized System of Preferences (GSP) have to be based mostly on goal and clear standards for justification underneath the Enabling Clause. If there is no such thing as a such goal criterion, any coverage should apply equally to all equally located nations.
Whereas, this ruling is with respect to growing nations, the implication is obvious: discriminatory software of commerce preferences or penalties, absence of a legally recognised justification, is impermissible. By analogy, america’ imposition of a harsher tariff regime on India, with out imposing comparable measures on different importers of Russian oil, is prone to be seen as an unjustifiable departure from MFN obligations as this example isn’t coated by any of the recognised exceptions to the MFN precept. US has neither signed a Free Commerce Settlement with Turkey or China nor does it have any goal standards for permitting a regime with preferential tariffs for Turkey or China.
Along with the MFN issues, the U.S. measure raises potential points underneath Article II of GATT 1994, which prohibits WTO members from imposing duties or fees on imports that exceed the sure charges set forth of their schedules of concessions. These sure tariffs represent a important aspect of the authorized certainty that WTO guidelines are supposed to offer. If the cumulative 50% tariff utilized to Indian items exceeds the U.S.’s binding commitments, as scheduled with the WTO, the measure would represent a prima facie violation of Article II:1. In Argentina – Safeguard Measures on Imports of Footwear, it has been noticed that measures exceeding sure charges, even when momentary or offered as safeguard actions, are inconsistent with WTO obligations except correct procedures underneath the Settlement on Safeguards are adopted. Within the current case, the tariffs have been imposed unilaterally with out resort to multilateral mechanisms, additional undermining their legitimacy underneath WTO regulation.
The U.S. administration has advised that the tariff measure is justified underneath Article XXI of GATT 1994, which permits members to take measures which it considers crucial for the safety of its important safety pursuits. Traditionally a not often invoked and much more not often adjudicated provision. Article XXI was scrutinized within the landmark case Russia – Site visitors in Transit (WT/DS512), the place the WTO Panel clarified that whereas members have some discretion in invoking the nationwide safety exception, this discretion isn’t absolute. The Panel held that the invocation have to be made in good religion and should relate to a real state of affairs of warfare or different emergency in worldwide relations. The present justification provided by america that India’s buy of Russian oil undermines U.S. international coverage could not meet the brink of an actual and rapid safety emergency.
The Panel’s interpretation of “emergency in worldwide relations” is a couple of state of affairs that creates a direct safety risk to the invoking nation. Whereas the warfare in Ukraine could qualify as a real emergency, the uswould have to show that India’s oil purchases immediately threaten U.S safety important curiosity, not simply that they battle with U.S international coverage. Merely undermining a international coverage goal doesn’t equate to the kind of “disaster” or “common instability” that the Panel contemplated as the premise for a nationwide safety exception. Additional, the invocation of Article XXI must be in good religion, a dispute based mostly on disagreement over international coverage fairly than a direct risk to a rustic’s army or territorial integrity might be seen as an try and leverage commerce guidelines to coerce a geo political end result.
This evaluation positive aspects additional weight from the collection of WTO disputes introduced towards earlier U.S. tariffs on metal and aluminium merchandise, additionally imposed underneath the identical nationwide safety clause throughout Trump’s first time period. In US – Metal and Aluminium Merchandise (WT/DS544 and associated circumstances). WTO panels discovered that these measures had been inconsistent with WTO obligations and that the circumstances cited by america didn’t quantity to a state of affairs justifying the invocation of Article XXI. That ruling not solely confirms that the nationwide safety exception is topic to scrutiny by the WTO’s Dispute Settlement Physique (DSB) but additionally units a precedent that may very well be utilized towards the present tariff hike on India. Ought to India determine to provoke WTO dispute settlement proceedings underneath the Dispute Settlement Enterprise (DSU), it will doubtless argue that the U.S. measure constitutes a violation of each Article I and Article II of GATT, and that the Article XXI defence is wrongly invoked.
India’s recourse on the WTO would start with a request for consultations underneath Article 4 of the DSU. If consultations fail, India may request the institution of a panel underneath Article 6, probably resulting in a discovering of violation and authorization to droop concessions underneath Article 22 if compliance isn’t forthcoming. Whereas the appellate mechanism of the WTO stays paralysed because of the U.S. blocking appointments to the Appellate Physique, a panel ruling in India’s favour would nonetheless carry important authorized and political weight, particularly if joined by different affected nations or amicus interventions. Nevertheless, it appears unlikely that India will provoke a problem on the WTO as it’s presently negotiating a Free Commerce Settlement with america and won’t need to jeopardise it.
In the end, this episode is emblematic of a broader pattern towards unilateralism and weaponization of commerce coverage underneath the guise of nationwide safety. The proliferation of such measures threatens to undermine the multilateral buying and selling system’s core rules of predictability, transparency, and non-discrimination. By focusing on India whereas exempting different comparable buying and selling companions, america not solely dangers violating binding authorized commitments underneath GATT 1994 but additionally undermines its credibility as a proponent of rules-based commerce. The authorized and strategic implications of this tariff measure will unfold within the coming months, however from a doctrinal standpoint, the case for its inconsistency with WTO regulation seems compelling.
Sharada Kalale and Shreya Sahu are final-year college students on the Nationwide Legislation College, Delhi, with a robust educational curiosity in worldwide commerce regulation and its intersection with coverage.
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