Even as both nations engage in heated discussions on a Bilateral Trade Agreement (BTA), India has increased the scope of retaliatory actions it may take in response to US steel and aluminum import tariffs. India announced in a notification to the World Trade Organization (WTO) that it would raise an additional $3.82 billion in import tariffs by adjusting duties on US goods. The most recent notification of retaliation was sent in reaction to the United States raising taxes on steel, aluminum, and their derivatives from 25% to 50% on June 3.
The higher duties will impact $ 7.6 billion of Indian exports to the US and through these additional taxes the US will collect $ 3.82 billion as taxes, India’s communication to the WTO said. “India reserves its right to suspend concessions or other obligations after the expiration of thirty days from the date of this notification,” the notification added.
India also maintained that the US has not notified these measures to the WTO, as required, even though these are, in essence, safeguard measures. It said that the actions taken by the US are inconsistent with its obligations under the GATT 1994 and Agreement on Safeguards (AoS). It also pointed out that the US has not engaged in the consultations with India on these duties as mandated under the AoS.
The first tranche of 25% additional duties were imposed in steel and aluminium from March 12 through a proclamation by US Trump. Against the 25% duty, India had intimated the WTO on May 9 that it will respond to them by imposing additional duties that will lead to collection of an additional $ 1.91 billion on US imports. On July 4 India had notified the WTO of its proposal to retaliate against 25% additional duties on auto and auto parts by the US.
In a communication to the Council for Trade in Goods at WTO India has maintained that the extra 25% duties from May 3 on imports of passenger vehicles and light trucks, and on certain automobile parts originating from India would impact $ 2.89 billion of its exports. Through extra duties the US will collect duty of around $ 723.75 million so India’s retaliatory action would be designed in such a way that it would collect the same amount of duties on imports from the US, India notified the WTO.
In 2018 also the first Trump administration had imposed 25% additional duties on steel and aluminium, India has retaliated to these duties in 2019 by imposing additional tariffs on imports from US of almonds, apples, chickpeas, lentils, walnuts, boric acid and diagnostic reagents among 21 other products. Both the impositions were challenged at the WTO by the opposite party.
In 2023 during Prime Minister Narendra Modi’s visit to US under Joe Biden presidentship, both sides agreed to end all their disputes at the WTO including the steel and aluminium tariffs and reciprocal action by India. In all seven WTO disputes were ended by India and the US through negotiations.
