India Mulls Tariff Retaliation on US Goods Over Steel, Aluminium Duty

India is expected to give a befitting response to US 50% tariffs as the country is considering tariffs countermeasures on certain American goods, according to a report published by Hindustan Times. The timing of India’s potential action could make it the first retaliatory step since US President Donald Trump’s July 31 announcement of a 25% tariff on all Indian goods.

The report stated that India has prepared legal grounds for the retaliatory action on steel and aluminium under World Trade Organisation rules. This came after the US refused New Delhi’s request for consultations over what India views WTO-non complaint safeguard measures disguised as national security actions.

“Washington is unwilling to address New Delhi’s concerns through talks, which leaves India with little option other than to retaliate. The US is unjustly acting against India’s economic interests even as the two countries are negotiating a bilateral trade agreement,” sources told HT.

It further stated that India has the right to counter the US’s unilateral and unreasonable measures. The retaliation could start with a “proportional response” to Washington’s 50% tariff on Indian steel, aluminium, and related products.

The steel and aluminium dispute began in February, when the Trump administration levied 25% tariffs on the metal, later raising them to 50% in June. In May, New Delhi notified the WTO of the dispute, asserting its rights to take proportionate measures, after duties at least $7.6 billion worth of Indian exports to the US.

Trump Tariffs on India

On August 7, Trump announced an additional 25% tariff on select Indian exports, effectively doubling the duty on the affected goods to 50%. The new tariffs will come into force on 27 August.

The White House called it a response to New Delhi's continued purchase of Russian Federation oil and said that the Trump administration is establishing a process for the potential imposition of similar tariffs on other countries that directly or indirectly import oil from the Russian Federation.

With this development, India becomes the most heavily taxed US trading partner alongside Brazil, far above its rivals such as China, Vietnam and Bangladesh, with the potential to jeopardise most of India’s $86.5bn in annual exports to the US.

The negotiations between India and the US are still going on for an interim trade deal, though there will be no compromise on the red lines with regard to duty concessions on agriculture items, dairy, and genetically modified (GM) products.

The two countries are negotiating a bilateral trade agreement (BTA). They are aiming to conclude the first phase of the pact by fall (October-November) this year.