India Strikes Back Over Tariffs, Proposes Duties On US Goods Amid Trade Talks

New Delhi: In a significant development amid ongoing trade negotiations, India has proposed levying tariffs on selected US goods in response to President Donald Trump’s continued imposition of import duties on steel and aluminium. The move, documented in a submission to the World Trade Organisation (WTO) dated May 12, marks India's first retaliatory action during Trump’s second term.

The WTO filing indicates that New Delhi plans to suspend certain trade concessions, effectively increasing tariffs on specific US products. While the document does not specify which products will be targeted, it underscores India's growing unease over Washington’s tariff regime, which originally began during Trump’s first term and was extended in March with 25 per cent levies on steel and aluminium imports.

India, the world's second-largest crude steel producer, noted in its submission that the US duties impact USD 7.6 billion worth of Indian exports. This retaliatory step highlights the tensions between the two democracies even as they work towards finalizing a bilateral trade agreement by the fall.

Trump's administration has previously accused India of being a “tariff abuser” and threatened to impose 26 per cent tariffs on Indian goods, a move that has intensified pressure on New Delhi. India has among the highest import tariffs globally and has also implemented its own protective measures, including a 12 per cent temporary tariff on imported steel—mainly aimed at curbing cheap imports from China.

The timing of India’s WTO action is particularly sensitive. Just last month, Indian officials had indicated a preference for dialogue over retaliation, emphasizing the importance of completing the trade deal. Analysts warn that this latest step could complicate negotiations.

Ajay Srivastava, founder of the Global Trade Research Initiative, remarked that while the measure is a clear response to Washington’s tariff aggression, it may also “cast a shadow” over broader efforts toward a free trade agreement.

India is simultaneously seeking to secure expanded access for its steel exports in talks with other trading partners. While the WTO action signals India's intent to defend its trade interests, it also reflects a shift from restraint to assertiveness in its dealings with Washington.

(With inputs from Reuters, Bloomberg)