India has escalated trade tensions with the United States by proposing retaliatory duties at the World Trade Organization (WTO), responding to Washington’s 25% tariff on automobiles and auto parts. The move comes as New Delhi estimates these U.S. tariffs could impact $2.89 billion of Indian exports, according to an official government notification.
Trade Countermeasures in Focus
India’s notification asserts its right to impose “equivalent” duties on U.S. goods, targeting an estimated $725 million in revenue matching the tariffs collected by Washington. While specific products and rates remain undisclosed, the announcement signals India’s refusal to back down amid ongoing negotiations.
The Numbers Behind the Dispute
Bilateral trade between the two nations reached $129 billion in 2024, with the U.S. facing a $45.7 billion deficit. Indian exports to the U.S. grew 22% year-on-year to $17.25 billion between April and May 2024, underscoring the economic stakes for both countries.
Deadlines vs. National Interest
Indian Trade Minister Piyush Goyal emphasized flexibility in talks, stating: “India never does any trade deal on the basis of deadline… we will accept it only when it is completely finalized and in the national interest.” This stance follows the U.S. threat to impose 26% tariffs on all Indian goods after July 9 if no agreement is reached.
While India has expressed willingness to reduce tariffs for the U.S., it remains firm on protecting its agriculture and dairy sectors from foreign competition. Analysts suggest the WTO filing serves both as a negotiation tactic and a legal safeguard should talks collapse.
