India has officially informed the World Trade Organization (WTO) of its intention to impose retaliatory duties on American imports in response to the United States' safeguard measures on steel and aluminium products. These actions by India are grounded in WTO rules that allow such retaliations when a member state is adversely affected by another's safeguard actions.

US Tariffs and India's WTO Action

The United States first implemented tariffs on steel and aluminium in March 2018, imposing 25% ad valorem duty on steel and 10% on aluminium. Initially labelled as safeguard measures, these tariffs were later justified by the US under the guise of national security, effectively bypassing the usual WTO safeguard notification process.

India responded by invoking the WTO Safeguards Agreement and requested consultations with the United States in April 2025. Despite this, the US argued that the tariffs were not safeguard measures but national security actions under Article XXI of the GATT, thus claiming exemption from WTO rules on safeguards.

The 2025 Tariff Extension and India's Retaliation

On February 10, 2025, the US revised and extended the safeguard measures on certain steel and aluminium products, effective from March 12, 2025, with a continuation of the 25% tariff on steel. This led India to escalate its response.

In a communication dated May 9, 2025, circulated at India's request, the country formally notified the WTO of its intention to suspend concessions and obligations. This suspension will be imposed on US-origin products in retaliation to the ongoing safeguard measures. India also highlighted that the US failed to notify these measures to the WTO as per norms.

India's countermeasures are significant — the US tariffs impact $7.6 billion worth of Indian exports, with potential annual duty collections by the US amounting to $1.91 billion. These figures underscore the substantial economic burden placed on Indian manufacturers and exporters.

National Security vs. Safeguard Measures: A Disputed Justification

While the US government claims the tariffs are essential for national security, India and several WTO members view them as de facto safeguard measures, which are subject to multilateral scrutiny and require notification and justification under WTO rules.

This national security justification is controversial and increasingly used by countries to evade WTO oversight. India maintains that these duties violate WTO obligations and that the US has not provided any credible evidence linking Indian exports to national security risks.

India also argues that its steel and aluminium exports pose no threat to US domestic industry or security. Many trade experts believe that the use of national security as a justification for tariffs sets a dangerous precedent and undermines the multilateral trading system.

WTO Dispute Resolution and India's Retaliatory Rights

The WTO’s Dispute Settlement Mechanism (DSM) provides a framework where members can challenge unjustified safeguard measures. If the measures are found to be inconsistent, the affected country — in this case, India — is entitled to compensation or retaliatory tariffs.

Given the US's repeated disregard for WTO rulings in recent years, India is moving ahead with unilateral retaliatory duties, which are permitted under WTO rules once proper notification has been made and consultations have failed to resolve the issue.

India's notification also marks an important step in asserting the sovereignty and rights of developing nations within the global trade system. The country’s stance could encourage other WTO members, including the European Union, China, and Brazil, who have also raised objections to the US measures.

Possible Economic and Trade Implications

The move could spark tensions between New Delhi and Washington, especially with growing trade and strategic relations in other sectors such as technology, defence, and energy. However, India has made it clear that it intends to protect its economic interests and maintain the sanctity of WTO rules-based trade.

Affected Indian industries, especially in steel and aluminium, have welcomed the move and urged the government to stay firm. The retaliatory duties could also impact US exporters targeting the Indian market, including sectors like agriculture, machinery, and automobiles.

The potential retaliatory list of products remains undisclosed but is expected to cover high-impact items that could put pressure on US exporters without severely affecting Indian consumers or manufacturers.

Background of the Dispute

This is not the first instance of friction over US tariffs on steel and aluminium. In 2018, India had similarly challenged the Trump administration’s tariff hikes at the WTO. Back then, the dispute remained unresolved due to delays in the WTO appellate body and the broader collapse of the dispute settlement mechanism.

The latest move in 2025 comes at a time when the WTO is undergoing reform discussions, and India’s firm stance could contribute to the debate on restoring balance and fairness to the trade dispute system.

Looking Ahead: What to Expect

If the US continues to resist multilateral consultation or refuses to withdraw or modify the measures, India is expected to enforce the retaliatory tariffs starting March 2025, coinciding with the effective date of the revised US measures.

While diplomatic discussions might still occur, India is prepared to escalate trade defence measures and ensure its exports are not unfairly penalised in the global market. The situation will also be a test for the Biden administration’s trade policies and its commitment to international trade rules.

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