INTERNATIONAL: India Plans Tariff Retaliation Amid US Non-Compliance
WTO Notices Ignored by US
India has formally notified the World Trade Organization (WTO) of its intent to impose retaliatory tariffs on select imports from the United States. This action follows the US’s non-compliance with prior WTO communications regarding its tariff impositions on Indian steel and aluminum exports.
Despite repeated representations, the US has rejected India’s claims, asserting that its tariffs are based on national security interests rather than protectionist intent. The US maintains that these actions are permissible under global trade norms and has declined further dialogue with New Delhi on the matter.
Strategic Move by New Delhi
In response, the Indian government is preparing to proportionately withdraw subsidies extended to US imports. Key sectors being reviewed for retaliatory tariffs include metals and other industrial goods. This measure is aimed at mitigating the economic damage caused by the increased US duties.
Sources indicate that the Indian Ministry of Commerce and Industry is finalizing a structured list of American products to face higher duties, aligning with WTO provisions for countermeasures in unresolved trade disputes.
Escalation Under Second Trump Administration
Under President Donald Trump’s renewed administration, the US announced steep tariff hikes on steel and aluminum imports. Initially set at 25%, these tariffs are scheduled to increase to 50% from June 4. This move could affect an estimated \$7.6 billion worth of Indian exports.
India has challenged the legality of these tariffs at the WTO, citing a violation of multilateral trade agreements and accusing the US of a protectionist policy stance that undermines global trade stability.
Trade Pact at Risk
These developments cast uncertainty over ongoing trade negotiations between India and the US. Reports suggest both nations were nearing a new trade agreement, under which India offered several concessions to reduce the bilateral trade deficit.
However, given Washington’s recent tariff measures, New Delhi may reconsider those concessions. Policy analysts warn that this could stall or derail the potential pact and deepen trade tensions between the two nations.