India plans tariffs response to US over steel, aluminium levy
NEW DELHI : India may slap tariff countermeasures on select American commodities, a retaliation to Washington’s move to impose a steep 50% duty in June on steel, aluminium and their derivatives from India, people aware of the matter have said.
To be sure, the levies on steel and aluminium have played out as a parallel trade dispute at the World Trade Organization, but its timing would make it the first Indian retaliation since Trump’s July 31 announcement of the 25% tariff on all Indian goods entering the US when trade talks failed to reach a breakthrough and his subsequent penalties over Russian oil purchases announced on August 6.
According to people aware of the matter, India has prepared legal grounds for the retaliatory action on steel and aluminium under World Trade Organization rules after the US rejected New Delhi’s request for consultations over what India considers WTO-non-compliant safeguard measures disguised as national security actions. “Washington is unwilling to address New Delhi’s concerns through talks, which leaves India with little option other than to retaliate,” one person said.
The steel and aluminium dispute dates back to February when the Trump administration imposed 25% tariffs on the metals, later doubling them to 50% in June. New Delhi intimated the WTO about the dispute and India’s rights to take proportionate action on May 9 after at least $7.6 billion worth of Indian exports to the US were affected by the duties.
“The US is unjustly acting against India’s economic interests even as the two countries are negotiating a bilateral trade agreement. India reserves the right to respond to unilateral and unreasonable actions of the US,” a second person said, adding that the beginning of the retaliation could be made with a “proportional response to the US imposition of 50% tariff on Indian steel, aluminium and their derivatives”.
America exports over $45 billion worth of merchandise to the Indian market, while India – prior to the Trump administration’s wide variety of tariffs –exported $86 billion worth merchandise to US.
How this balance changes is uncertain. Between February — when President Trump and Prime Minister Shri Narendra Modi resolved to expand bilateral trade to $500 billion and launch comprehensive trade negotiations — and the last two weeks, when Trump announced Indian exports will be slapped with 50% levy from August 28, the journey has been turbulent. The trade talks stalled, primarily over US seeking unfettered market access to economically sensitive sectors that New Delhi steadfastly refused, before appearing to be beset by the controversy around Russian oil purchases. “These unilateral, unjustified and unreasonable actions of the Trump administration raise doubt about its intent to have a fair, balanced and mutually beneficial bilateral trade agreement,” another person said. The escalating tariffs have effectively undermined bilateral trade negotiations, with India arguing that arm-twisting tactics make fair negotiations impossible.
According to one of the people cited above, what has affected the retaliation calculus was Trump’s comments on Thursday, when he rejected stepping up trade negotiations with India. “No, not until we get it resolved,” the president said at the Oval Office when asked about increased trade talks.
The broader trade relationship includes America’s $13.62 billion in energy exports to India in 2024-25, plus significant trade in electronics, chemicals, and other goods, highlighting the scale of economic interdependence between the two countries.
The US also maintains a services trade surplus with India of $102 million in 2024, with total bilateral services trade reaching $83.4 billion. US services exports to India totalled $41.8 billion, up 15.9% from 2023, while imports reached $41.6 billion, up 15.4%.
Source : Hindustan Times