India–U.S. Steel and Aluminium Tariff Dispute

India and the United States have had a turbulent trade relationship over the last decade, with multiple frictions related to tariffs, market access, and unilateral trade measures. A major point of contention has been the U.S. decision to impose 25% tariffs on steel and aluminium imports—first in 2018 under President Trump, and reinstated in 2025 during his second term. In response, India has now notified the WTO of its intent to impose retaliatory tariffs worth $7.6 billion on U.S. imports.

Key Highlights:

• In March 2025, U.S. President Donald Trump reimposed 25% tariffs on all imported steel and aluminium, ending all exemptions.
• India, citing WTO norms, notified its intent to impose retaliatory tariffs worth $7.6 billion on U.S. goods.
• The move mirrors earlier developments in 2018–19, when India retaliated to U.S. tariffs and GSP withdrawal by imposing tariffs on 28 U.S. products like walnuts and apples.
• The new tariffs by India will come into effect 30 days after notification (early June 2025).

India’s Position and WTO Standpoint

• India argues the U.S. tariffs are disguised safeguard measures and not genuine national security measures as claimed by the U.S.
• India claims the U.S. has violated WTO norms, especially the Agreement on Safeguards (AoS) and the GATT 1994, by not engaging in prior consultation.
• India, along with the EU, China, and the U.K., contests the U.S. interpretation, stating that the move is protectionist in nature.

Impact on Indian Industry:

• Past data shows steep decline in steel exports to the U.S. (down nearly 48% in FY20).
• Industry fears renewed loss of competitiveness due to higher export costs.
• SAIL and other steel manufacturers have warned of increased global volatility and disruption of trade flows.
• ASMA (Aluminium body) supports the move, stating that reciprocal action will help level the negotiating field.

Economic Implications:

• Globally, tariffs contribute to input cost inflation, supply chain disruptions, and trade diversion.
• The U.S. Fed's 2019 study observed that earlier tariffs only gave a “small boost” to manufacturing jobs, but were offset by higher costs and retaliatory measures.
• India's retaliation shows a more assertive trade posture, aligning with ‘Atmanirbhar Bharat’ and ‘Make in India’

Strategic and Diplomatic Dimensions:

• India’s move reflects its evolution as a rules-based trade actor advocating for multilateralism, unlike the U.S.'s increasing unilateralism.
• The issue could stall negotiations on broader trade agreements, but may also push both sides toward a Mutually Agreed Solution (MAS).
• India is signaling that it will not compromise on politically sensitive sectors, and is ready to use WTO mechanisms to protect its interests.

Way Forward

• A diplomatic resolution remains possible through WTO consultations or bilateral negotiations.
• India must balance its strategic relationship with the U.S. with the need to protect domestic manufacturing.
• Simultaneously, India should strengthen its engagement in regional trade groupings (like IPEF, RCEP alternatives) to diversify markets.