India plans fresh tariff retaliation against US steel & auto duties

India has notified the WTO of its plan to impose retaliatory duties worth US$ 3.82 billion on US imports, responding to the US hike in steel, aluminium, and auto tariffs. The move follows stalled consultations and claims of WTO rule violations by the US. While past disputes were resolved in 2023, fresh tensions threaten to reignite trade friction even as both sides work on a Bilateral Trade Agreement.

India has increased the scope of its planned retaliatory measures against the US tariffs on steel and aluminium imports, even as both countries continue to negotiate a Bilateral Trade Agreement (BTA).

In a fresh notification to the World Trade Organisation (WTO), India stated it would adjust duties on US imports to match the estimated additional import duties of US$ 3.82 billion that the US would collect through its revised tariffs. The US had hiked duties on steel, aluminium, and their derivatives to 50% from 25% on June 3.

These increased tariffs affect US$ 7.6 billion worth of Indian exports to the US. “India reserves its right to suspend concessions or other obligations after the expiration of thirty days from the date of this notification,” the communication said.

India has argued that the US failed to notify the WTO of these tariff changes, even though they qualify as safeguard measures. It added that the US actions are inconsistent with its commitments under the GATT 1994 and the Agreement on Safeguards (AoS). India also noted that the US has not held consultations with India as required under the AoS framework.

India had initially notified the WTO in May that it would impose duties to collect US$ 1.91 billion in retaliation against the first tranche of 25% tariffs on steel and aluminium imposed in March 2024. On July 4, India also informed the WTO of its plan to retaliate against the US’s 25% additional duties on auto and auto parts, which affect US$ 2.89 billion of Indian exports.

In 2019, India had previously retaliated against similar US tariffs imposed by the Trump administration by increasing duties on 21 US products. In 2023, both countries agreed to withdraw all pending WTO disputes, including those on steel and aluminium, during Prime Minister Modi’s visit to the US.