Saturday, March 29, 2025
In a sharp escalation of trade tensions, India is weighing retaliatory measures against the United States after Washington rejected New Delhi’s WTO notice challenging steep import tariffs on steel and aluminium. The US maintains that its tariff hikes are not “safeguard measures” and therefore not open for WTO-sanctioned retaliation — a claim India disputes.
India had formally informed the World Trade Organization (WTO) on May 9 that it intends to suspend trade concessions granted to the US in response to the US imposing 25% import tariffs on all steel and aluminium shipments starting March 12. These tariffs were further doubled to 50% by the Trump administration on May 30, citing national security concerns — a move that has only worsened the standoff.
Officials familiar with the matter, speaking anonymously, said India is seriously considering revoking certain trade concessions on US imports such as almonds and walnuts. Additionally, India may impose higher customs duties on US-origin metals as a proportional response if bilateral discussions under the proposed Bilateral Trade Agreement (BTA) fail to make progress.
On May 22, the US informed the WTO that India’s proposed retaliatory action violates multilateral trade rules. Washington argues that since the metal tariffs are not “safeguard measures,” Article 8.2 of the WTO’s Safeguards Agreement — which allows for suspension of concessions — does not apply. It further ruled out bilateral negotiations under WTO rules regarding these tariffs, stating: “The United States will not engage on Section 232 tariffs under the Safeguards Agreement, as we do not view them as safeguard actions.”
India, for its part, is awaiting the outcome of ongoing BTA talks. According to insiders, the US negotiation team is expected to visit New Delhi this week to try to resolve trade differences before India takes further steps. If no deal is reached, India could act by June 8 — the deadline outlined in its WTO notice.
Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian Trade Service official, warned that higher US tariffs pose a direct risk to Indian exporters. In FY25, India exported $4.56 billion worth of steel, aluminium, and related goods to the US, including $3.1 billion in steel articles and $860 million in aluminium products.
A May 14 Hindustan Times report had already highlighted India’s intent to levy retaliatory import duties impacting $7.6 billion worth of US exports. India estimated it would collect up to $1.91 billion in additional duties — equal to the benefits being withdrawn.
Though the Indian commerce ministry has yet to comment, the situation remains fluid. The prospect of retaliatory tariffs now looms large, especially as political and trade relations between the two democracies enter a new phase of strain.
