India’s Daring Move to Protect Steel on the WTO’s Doors

Introduction: The Headie of Protection

As the headline mentions, “India has proposed to impose retaliatory tariffs to counter US duties on Indian Steel and Aluminium. India has informed the World Trade Organisation (WTO) of its plans to impose such tariffs on select American goods.” This move from a nation known for its steel industry to a trade giant signals a bold strategy aimed at safeguarding its economic interests. The US, imposing these tariffs, is making a public statement that could have profound implications for India’s global trade.

Background: Context and Reason

India’s decision stems from an ongoing conversation with the US over tariffs on steel imports. The US has been clear in its stance regarding GATT (General Agreement on Trade and Tariff) 1994 and the Agreement on Safeguards (AoS), but India remains cautious about adopting safeguard measures as a political act.

The US has long viewed its trade with India through national security lenses, advocating that tariffs are safeguards for protecting U.S. industries from foreign competition. However, this approach is seen by many as arbitrary and restrictive.

WTO Response: Defending the Approach

India informed the WTO about its plan to impose retaliatory tariffs on certain American goods. The WTO, recognizing India’s commitment to protecting national interests, acknowledged these tariffs as necessary for a trade war resolution. Importantly, the WTO maintained that these measures were not safeguard measures but instead targeted GATT and AoS.

As part of their response, India is close to finalizing a bilateral trade agreement with the Trump administration, indicating its serious stance on protecting its industries in the face of US tariffs.

Trade Damage Calculation

The proposed duties could result in significant trade-offs. According to WTO data, these measures might impact 7.6 billion dollars worth of imports of Indian products and estimate a duty collection of 1.91 billion dollars from these goods. If passed through, this could be substantial damage to India’s global trade.

Broader Implications

Protecting steel is not merely about a trade war; it reflects India’s broader strategy towards industrial competitiveness and national security. By asserting its rights in steel, the country signals a commitment to maintaining its core industries, which are essential for economic stability and growth.

Conclusion: Reiterating the Move

India’s move to protect steel on the WTO highlights its dedication to safeguarding its industries and national interests. While future actions will depend on whether these tariffs pass through, it is clear that this strategy underscores a stronger global trade framework. The US’ response remains a critical consideration for India as it navigates its economic and strategic landscape.