India has formally notified the World Trade Organisation (WTO) of its intent to impose retaliatory duties on US products in response to safeguard tariffs imposed by Washington on steel and aluminium imports. The proposed move aims to offset adverse trade impacts estimated at $1.91 billion.
India challenges US national security justification
The WTO communication, dated May 9, 2025, states that India plans to suspend concessions and obligations under WTO rules equivalent to the harm caused by the US safeguard measures. The American government has defended the tariffs—25 per cent on steel and 10 per cent on aluminium—on the grounds of national security, asserting they are not safeguard measures and thus outside WTO purview.
India, however, has contested this view, maintaining that the US actions contravene the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Safeguards (AoS). India argues that these duties fall within the scope of WTO scrutiny and has sought consultations under WTO norms, though the US has yet to formally notify the organisation of its measures.
Tariff suspension could follow in 30 days
India’s proposed response would target US products with higher tariffs, intended to collect an amount equivalent to the duties imposed by the US. The proposal affects approximately $7.6 billion worth of Indian exports to the US. If consultations are not held or the dispute remains unresolved, India reserves the right to implement the increased tariffs 30 days after the notification date.
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Additionally, India retains the right to revise the list of targeted products and tariff rates, and to issue supplementary or replacement notifications as necessary.
Broader implications amid bilateral negotiations
This development comes at a critical juncture, as India and the US continue discussions on a possible bilateral trade agreement (BTA). A delegation from India is visiting the US this week for high-level trade talks. The proposed retaliatory duties also follow a history of trade friction between the two countries. India had previously imposed retaliatory tariffs on 28 US products in 2019 after the initial duties were enacted during the Trump administration.
As India signals its willingness to assert its rights through multilateral and bilateral avenues, the outcome of ongoing trade talks may shape the future of India–US trade relations and set precedents for WTO engagements on security-related tariff measures.
