In a significant escalation of trade tensions, India has formally notified the World Trade Organisation (WTO) that it intends to impose retaliatory tariffs worth $7.6 billion on imports from the United States, challenging Washington’s recent decision to raise import duties on steel and aluminium to 25%.

This comes at a critical juncture when India and the U.S. are attempting to advance bilateral trade negotiations. The Indian government, however, has deemed the U.S. tariffs to be in violation of global trade norms, potentially derailing current discussions and reigniting a dispute that first surfaced during the Trump administration’s first term.

India Targets U.S. Tariffs on Steel and Aluminium

India’s action stems from the re-imposition and expansion of tariffs by the U.S. in February 2025, which eliminated all country-specific and product-specific exemptions that had earlier been negotiated. With these blanket 25% import duties now applying universally, India argues that the move constitutes a safeguard measure—a classification that demands prior consultation under Article 12.3 of the WTO’s Agreement on Safeguards (AoS).

“The measures have not been notified by the United States to the WTO, but are, in essence, safeguard measures,” India said in its communication to the WTO.

“India maintains that the measures taken by the United States are not consistent with the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Agreement on Safeguards.”

India alleges that since the U.S. did not consult India prior to implementing the tariffs, New Delhi now has the right to suspend trade concessions—a retaliatory measure allowed under WTO rules when safeguards are applied without consultations.

WTO Retaliation Timeline: 30 Days from Notification

India’s notice to the WTO was dated May 9, 2025, meaning the proposed retaliation could take effect after June 8, 2025, unless the two countries reach a settlement.

“India reserves its right to suspend concessions or other obligations after the expiration of thirty days from the date of this notification,” the document states.

According to India’s communication, the retaliatory duties will be equivalent in value to the trade damage caused. It estimates that the U.S. tariffs will impact $7.6 billion worth of Indian exports, resulting in about $1.91 billion in lost trade benefits—an amount India seeks to match through increased duties on selected U.S. products.

No Response from the U.S., Talks Declined

India had sought to initiate consultations with the U.S. as early as April 2025, but Washington declined, arguing that the new duties were imposed under national security considerations, not as trade safeguards. India strongly contests this rationale.

“The U.S. refusal to consult and its framing of the tariffs under national security rather than trade gives India a legal path to retaliate under WTO rules,” said a trade official familiar with the developments.

This rejection of dialogue has hardened India’s stance, prompting the notification and potential retaliatory action via the WTO mechanism.

Historical Precedent: 2019 Tariffs After GSP Exit

This would not be the first time India has retaliated against the U.S. over trade policy. In June 2019, after the U.S. removed India from its Generalised System of Preferences (GSP) and imposed steel and aluminium tariffs, India slapped higher duties on 28 American products. Those tariffs, impacting approximately $240 million in U.S. exports, remained in place until September 2023, when they were rolled back following Prime Minister Narendra Modi’s state visit to Washington.

The current dispute appears to revive similar tensions, albeit on a much larger scale.

Implications for U.S.-India Trade Ties

While both nations have recently made strides toward deeper economic cooperation, including resolving pending WTO disputes in 2023, the new steel tariffs threaten to stall progress on a bilateral trade deal.

Trade analysts caution that retaliatory measures, while legal under WTO provisions, could destabilise global trade relations at a time when geopolitical tensions and supply chain vulnerabilities are already high.

“At a time when countries should be working to stabilise trade, these tit-for-tat tariffs could result in long-term damage,” said a Geneva-based trade expert.

India, however, insists that its action is legally justified and proportionate, and that the U.S. has acted outside of WTO norms by invoking national security without formal safeguards procedures.

Tariff Details Await Finalisation

India has not yet released the final list of U.S. products that will face increased tariffs, but these are expected to target items that will maximize pressure without harming critical imports. Analysts speculate that agricultural goods, industrial components, and consumer electronics could be on the list.

India’s final retaliatory measures will be communicated to the WTO’s Council for Trade in Goods and the Committee on Safeguards, as per standard procedure. A government source indicated that India would choose products that minimise domestic impact while maintaining leverage.

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