India to slap retaliatory tariffs on US goods under WTO norms over steel, aluminium duties

India has formally notified the World Trade Organisation (WTO) of its intent to impose retaliatory duties on American goods in response to the US decision to extend tariffs on steel and aluminium imports.

In a communication dated May 9 and circulated at India's request, New Delhi said the move is in response to safeguard measures taken by the US that affect $7.6 billion worth of Indian exports, with duty collections amounting to nearly $1.91 billion.

India challenges ‘national security’ defence

The US had first imposed a 25 per cent tariff on steel and 10 per cent on aluminium products in March 2018 under the pretext of national security, invoking Section 232 of its trade laws. These measures, which were later extended in 2020, were recently revised again on February 10 this year and are set to take effect from March 12, 2025, for an indefinite period.

India, however, contends that these are essentially safeguard measures and not consistent with global trade norms under the General Agreement on Tariffs and Trade (GATT) 1994.

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"The US has not notified these measures to the WTO, but they are, in essence, safeguard measures," the communication said. India also noted that the required consultation process under the WTO’s Agreement on Safeguards (AoS) has not taken place.

Retaliation in the form of fresh tariffs on US goods

India’s proposed suspension of concessions would take the form of increased tariffs on selected American products, equivalent in value to the impact suffered by Indian exports. The government also reserved the right to adjust the product list and tariff rates, depending on the evolving situation.

“Without prejudice to the effective exercise of its right... India reserves the right to suspend concessions after 30 days from the date of this notification,” the document added.

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New Delhi clarified that it may modify, withdraw, or issue additional notifications as required and will continue to keep the Council for Trade in Goods and the Committee on Safeguards informed about future steps.

Background and ongoing trade talks

This is not the first time India has retaliated against US tariffs. In June 2019, after the Trump administration’s initial move, India imposed higher duties on 28 American products, including almonds and walnuts, and also filed a complaint with the WTO.

The latest move gains added significance as India and the US are currently in talks for a bilateral trade agreement (BTA). An Indian delegation is also expected to visit Washington this week for further negotiations.