India is considering imposing tariff countermeasures on select US commodities in response to Washington’s steep 50 percent duty on Indian steel, aluminium, and related products. The move comes after the US rejected India’s request for consultations, prompting New Delhi to prepare legal grounds for action under World Trade Organization (WTO) rules.
A Long-Running Trade Dispute
The dispute began in February when the Trump administration imposed a 25 percent tariff on steel and aluminium, later doubling it to 50 percent in June. India has argued that these measures are disguised as national security safeguards and violate WTO norms. At least $7.6 billion worth of Indian exports have been affected, leading New Delhi to notify the WTO of its intent to take proportionate action.
First Major Retaliation in Years
If implemented, the tariffs would mark India’s first significant retaliatory trade measure against the US since July 31, when President Trump announced a 25 percent tariff on all Indian goods following stalled trade talks. Further strain was added on August 6 with US penalties over India’s Russian oil purchases.
Economic Stakes and Market Access Disputes
The US exports over $45 billion worth of goods to India annually, while India exported $86 billion worth of goods to the US before the recent tariffs. Negotiations aimed at boosting bilateral trade to $500 billion have faltered over US demands for greater access to sensitive Indian sectors. India has refused, citing economic and strategic priorities.
Wider Economic Interdependence
Beyond goods, the trade relationship is deeply integrated. The US exported $13.62 billion in energy products to India in 2024–25, alongside major flows in electronics, chemicals, and other goods. In services, the US maintains a $102 million surplus, with bilateral services trade reaching $83.4 billion in 2024.
Rising Tensions and Political Signals
According to officials, the decision to move forward with retaliatory tariffs was influenced by Trump’s recent statement rejecting further trade talks until disputes are resolved. Indian officials argue that unilateral actions and high tariffs undermine the possibility of a fair and mutually beneficial agreement. With WTO proceedings ongoing, India’s proportional response could signal a sharper turn in trade relations between the two countries.
