India has proposed retaliatory tariffs on select US products, in response to US duties on steel and aluminium imports. The proposed measures target $7.6 billion worth of imports.

The Indian government contends that the US tariffs are inconsistent with World Trade Organisation (WTO) rules and has requested formal consultations to address the dispute, it writes in a note to the WTO seen by Kallanish.

“India hereby notifies the Council for Trade in Goods of its proposed suspension of concessions and other obligations referred to in Article 8.2 of the Agreement on Safeguards (AoS),” the note states.

The notification pertains to safeguard measures extended by the US on imports of aluminium, steel and related derivative products.

India argues that the US measures – though not formally notified to the WTO as safeguard actions – are, in essence, safeguard measures and should be treated as such. The Indian government maintains these actions are inconsistent with the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO's Agreement on Safeguards (AoS).

“The safeguard measures would affect $7.6 billion imports into the United States of the relevant products originating in India, on which the duty collection would be $1.91 billion. Accordingly, India's proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the United States,” it concludes. The proposal could come into effect after 30 days.

India and the US are currently engaged in negotiations towards a Bilateral Trade Agreement (BTA), with both sides aiming to double bilateral trade to $500 billion by 2030. The proposed retaliatory tariffs and the broader trade dispute may feature prominently during upcoming talks, as Indian trade negotiators are scheduled to visit Washington next week for the next round of discussions.

Indian steel market participants do not expect this move to impact the market just yet, and are awaiting further clarity on the specific US-origin products that would be impacted by India’s proposed tariffs.

Source:Kallanish