WTO Move Against US Signals India Is No Pushover

India’s notice to the World Trade Organization of its intention to suspend trade concessions granted to the United States signals a tougher stance—especially in politically sensitive sectors such as steel and aluminium—that aligns with its “Make in India” industrial strategy.

The notice, issued on May 12, marks India’s invocation of its rights under Article 12.5 of the WTO Agreement on Safeguards. This legal provision allows a country to retaliate when another member imposes safeguard measures without proper notification or consultations.

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 granted on February 10, with an effective date of March 12. India argues that these actions, though never officially notified by the US as safeguard measures, function as such and violate WTO rules under the General Agreement on Tariffs and Trade 1994 and the Safeguards Agreement. Crucially, the US did not hold mandatory consultations under Article 12.3, prompting India to assert its right to retaliate.

India’s Proposal
India’s future countermeasures could include raising tariffs on a list of US imports in a manner that is “substantially equivalent” to the damage inflicted on Indian exports. According to the notification, US safeguard duties impact approximately $7.6 billion worth of Indian exports, resulting in an estimated $1.91 billion in additional duties collected by the US. India intends to recover this amount through retaliatory duties on selected American goods.

Unless consultations are initiated or the US measures are withdrawn, India’s retaliatory tariffs may come into effect 30 days from the notification date—that is, June 8, 2025. India has also reserved the right to adjust product coverage and tariff rates to ensure a proportional economic response, signaling its determination to use WTO mechanisms robustly.

This is not India’s first brush with safeguard retaliation. In June 2019, India imposed higher tariffs on 28 US products—ranging from almonds and apples to chemicals—after the US removed India from its Generalized System of Preferences and continued its steel and aluminium tariffs. That action, which covered about $240 million in trade value, marked India’s first use of WTO-sanctioned retaliation.

The duties were withdrawn in September 2023 following Prime Minister Narendra Modi’s state visit to Washington, where both countries agreed to resolve six ongoing WTO disputes, including this one.

Bilateral Ties
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. Still, India’s calibrated, rules-based approach contrasts with the unilateralism of US trade actions and positions India as a staunch defender of multilateral trade norms.

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, potentially affecting US exporters and deepening trade frictions. Either way, India’s move reflects a broader shift: a willingness to assert itself within global trade rules to protect its economic interests.