India's Bold Move Against US Tariffs

India's decision to impose retaliatory import duties on certain US goods, in response to American tariffs on steel and aluminium, is causing a stir in international trade circles. The Global Trade Research Initiative (GTRI) warns that this could "cast a shadow" on the ongoing trade deal talks between the two nations.

Potential Outcomes and US Response

The think tank suggests that the issue could be resolved if the US agrees to hold consultations with India or withdraws the tariffs. However, if no agreement is reached, India is likely to proceed with its retaliatory tariffs by early June, potentially escalating trade tensions.

India's WTO Notification and Strategic Sectors

India has formally notified the World Trade Organisation (WTO) of its intent to suspend certain trade concessions to the US, a move that could result in higher tariffs on specific US products. This action underscores India's firm stance in protecting its strategically important sectors like steel and aluminium, aligning with its 'Make in India' initiative.

Looking Ahead: The Path to Resolution

The resolution of this dispute largely depends on the US's next steps. India aims to recover approximately USD 1.91 billion through retaliatory duties, a response to the additional duties collected by America on Indian exports. The ongoing negotiations for a bilateral trade agreement (BTA) between India and the US are at a critical juncture, with an Indian delegation set to visit the US to continue talks.