India’s Trade Strategy: Proposed Duties on U.S. Steel and Aluminum Imports
India is making waves in the global trade arena by announcing plans to impose duties on select U.S. products, primarily steel and aluminum. This move comes as a direct response to the United States’ tariffs on Indian-made steel and aluminum, stirring significant attention as both nations engage in discussions over a potential bilateral trade agreement (BTA). An Indian delegation is currently in the U.S. for crucial trade negotiations this week.
Impact of U.S. Tariffs on Indian Imports
The recent communication India sent to the World Trade Organization (WTO) highlights that U.S. tariffs could affect over $7 billion in imports from India. The Indian government estimates that collecting duties from these tariffs could yield around $2 billion. India’s proposal to suspend concessions would mean equivalent tariffs on U.S. products, aimed at countering the adverse effects of these U.S. measures.
- Estimated impact on imports: $7 billion
- Projected duty collection: $2 billion
- Products affected: Selected U.S. goods
India’s Critique of U.S. Trade Practices
In its WTO communication, India pointed out that the U.S. has not officially notified these tariffs, which it views as safeguard measures. The Indian delegation emphasized that these tariffs violate the General Agreement on Trade and Tariffs (GATT) of 1994 and the Agreement on Safeguards (AoS). As consultations mandated by the AoS have not occurred, India reserves the right to impose its own suspensions in response.
The communication stated, “The planned suspension of concessions will involve increased tariffs on specific U.S. products.” India has made it clear that it intends to act after a 30-day notice period from the date of this notification.
WTO Safeguard Agreement: A Brief Overview
Earlier this year, India sought consultations with the U.S. under the WTO’s safeguard framework after the latter imposed tariffs, citing national security concerns. The U.S. contended that its measures should not be classified as safeguard actions.
The U.S. initially enacted these tariffs on March 8, 2018, applying a 25% tariff on steel and a 10% tariff on aluminum, effective March 23, 2018. These measures have been extended multiple times, with the latest revisions coming in February 2025, now imposing a 25% tariff indefinitely.
India’s Position and Future Actions
India has formally notified the WTO of its intent to suspend concessions concerning U.S. imports of aluminum and steel. The communication, dated May 9, 2025, underscores India’s flexibility to adjust the products and tariff rates as necessary.
India stated, “We reserve the right to withdraw or modify this notification as needed.” This strategic positioning indicates India’s readiness to adapt based on the evolving trade landscape.
What Lies Ahead for India and the U.S.?
As India navigates its next steps, it is poised to inform both the Council for Trade in Goods and the Committee on Safeguards regarding its tariff plans. This ongoing tariff discussion remains a critical component in the broader context of U.S.-India trade relations.
The Trump administration’s initial tariffs in 2018 were met with retaliatory duties from India on 28 U.S. products, including almonds and walnuts. As both nations continue to negotiate, the outcome of these discussions will have lasting implications for international trade dynamics.
In summary, India’s proposed duties on U.S. imports reflect a significant escalation in the ongoing trade tensions, highlighting the complexities of global trade relations and the importance of effective negotiation strategies.
