In its first move of retaliation under Donald Trump’s second term, India has proposed tariff hikes on select US goods, responding to continued US duties on steel and aluminum. This shift in trade posture comes even as New Delhi and Washington inch closer to finalizing a long-awaited bilateral trade deal. The move has been formally communicated to the World Trade Organization (WTO), signalling a more assertive Indian approach amid rising trade tensions.
India Responds to Steel and Aluminum Duties
According to a document submitted to the WTO dated May 12, India’s government has proposed a suspension of certain trade concessions by imposing higher tariffs on selected US imports. Although the document didn’t specify the products targeted, the move directly counters the 25% levies on steel and aluminum imports that were reintroduced in March 2025—an extension of Donald Trump’s 2018 protectionist policies.
India, which is the second-largest crude steel producer globally, said that the US tariffs affect $7.6 billion worth of Indian exports. The retaliatory tariffs are aimed at leveling the playing field, particularly as Washington has also threatened to slap 26% reciprocal duties on Indian goods.
Just last month, India had imposed a temporary 12% tariff on imported steel, mostly to prevent market flooding by cheaper Chinese steel. Now, New Delhi is taking a more assertive global stance while attempting to secure fairer access for Indian exports through bilateral and multilateral trade discussions.
Trade Deal Talks Under Pressure
The timing of India’s move is notable. The country had previously signaled that it would refrain from tit-for-tat measures, prioritizing diplomacy over escalation. However, with no rollback of US tariffs in sight and growing political pressure at home, the Indian government has opted to leverage WTO mechanisms to register its protest.
Negotiations between India and the US for a comprehensive trade deal are still ongoing, with hopes of wrapping it up by fall. The proposed retaliatory tariffs could complicate the talks. Trade experts say the measure might add friction to the already delicate discussions.
Ajay Srivastava, founder of the Global Trade Research Initiative, remarked that India’s WTO filing “comes at a delicate moment” as both nations are aiming for a broader agreement. He noted that this retaliation could cast a shadow over the evolving trade partnership.
