While both nations, the US and India, engage in a Bilateral Trade Agreement (BTA) discussion, the latter country has shown an increased retaliatory action as opposed to the current import tariff on aluminium and steel imposed by the US. Recently, India announced to the World Trade Organisation (WTO) its intention to raise an additional USD 3.82 billion in import tariffs with significant adjustment duties on US goods. Does this signal a further trade tension between the two nations or the start of a new trade war?
The unprecedented hike in the US tariff on aluminium and steel from 25 per cent to 50 per cent on June 3, 2025, has been the stimulus for India for the additional tariff cost. With the higher duties, the Indian exports will witness an impact worth USD 7.6 billion to the US, while the US is expected to receive USD 3.82 billion as tax through these additional duties, claimed India to the WTO.
Since the time is highly crucial for both nations due to the ongoing heated discussion under the trade agreement, the initial phase is to be reckoned by September to October. Nonetheless, India’s proposal to suspend concessions or any other compulsion can be considered as an increased tariff on certain US products.