May 14, 2025
NEW DELHI – The Global Trade Research Initiative (GTRI) on Tuesday said India’s proposal to impose retaliatory import duty on certain US products in response to tariffs on steel and aluminum could cast a shadow over ongoing negotiations for a trade agreement between the two countries.
Think tank GTRI said that if the US engages in consultations with India on the matter or withdraws tariffs, a resolution may be reached.
India’s retaliatory import duties could take effect in early June, potentially impacting US exporters and deepening trade frictions, it added.
In a significant move targeting US safeguard duties on steel, aluminium, and their derivative products, India has formally notified the World Trade Organisation (WTO) of its intention to suspend trade concessions granted to the US.
“India’s latest WTO action comes at a delicate moment. New Delhi and Washington are exploring a broader free trade agreement, and this retaliation could cast a shadow over negotiations,” GTRI Founder Ajay Srivastava said.
He added the move signals a tougher Indian stance, especially in politically sensitive sectors like steel and aluminium that align with its Make in India industrial strategy.
“Much now depends on Washington’s response. If the US engages in consultations or withdraws the contested measures, a resolution may be reached. Otherwise, India’s tariff response could take effect in early June,” he said.
According to the WTO notification, US safeguard duties impact about 7.6 billion worth of Indian exports, resulting in an estimated USD 1.91 billion in additional duties collected by America.
India intends to recover this amount through retaliatory duties on selected American goods.
GTRI said that at the heart of the dispute is the continuation of US safeguard tariffs on imports of steel, aluminium, and related products, originally imposed in 2018 on national security grounds and renewed multiple times since.
The latest extension was enacted via US Presidential Proclamations dated February 10, 2025, with an effective date of March 12 this year.