India notifies WTO of intent to hit US goods with retaliatory tariffs

India has formally signaled its intention to levy retaliatory duties on a range of American goods, a direct response to the United States' ongoing and recently revised tariffs on steel and aluminum imports.

In a formal communication to the World Trade Organisation (WTO), New Delhi outlined its position, challenging the basis of the US measures and reserving its right to implement countermeasures.

The crux of India's contention lies in the nature of the US tariffs.

The US first imposed these duties – 25% on steel and 10% on aluminum – in March 2018, invoking Section 232 of its trade laws, which allows for such measures on grounds of "national security."

These tariffs, which were subsequently extended in 2020, underwent another revision on February 10 of this year and are slated to take effect from March 12, 2025, for an indefinite period.

India, however, disputes this "national security" defense. In its communication to the WTO, dated May 9 and circulated at India's request, New Delhi argued that the US actions are, in essence, "safeguard measures."

India contends these measures are inconsistent with global trade norms established under the General Agreement on Tariffs and Trade (GATT) 1994.

"The US has not notified these measures to the WTO, but they are, in essence, safeguard measures," the communication stated.

Furthermore, India pointed out that the mandatory consultation process stipulated under the WTO’s Agreement on Safeguards (AoS) has not been initiated by the United States.

Retaliation readied: counter tariffs on US products

As a consequence of what it deems unjustified US actions affecting $7.6 billion worth of its exports (with estimated duty collections amounting to nearly $1.91 billion), India is proposing a "suspension of concessions."

This would manifest as increased tariffs imposed on a selection of American products.

The value of these counter-duties is intended to be equivalent to the economic impact suffered by Indian exporters due to the US metal tariffs.

The Indian government has also explicitly reserved the right to modify both the list of targeted U.S. products and the specific tariff rates applied, depending on how the situation evolves.

Thirty-day window before action

The notification to the WTO serves as a formal precursor to potential action. "Without prejudice to the effective exercise of its right… India reserves the right to suspend concessions after 30 days from the date of this notification,” the document clarified.

This provides a window for potential dialogue or resolution before India implements its proposed retaliatory measures.

The move signals India's firm stance against what it perceives as protectionist measures disguised under national security claims and its preparedness to utilize WTO mechanisms to defend its trade interests.

The coming weeks will be crucial in determining whether a diplomatic solution can be found or if a new front in global trade disputes will open between India and the United States.