India’s retaliatory tariffs on US steel imports: Implications on India’s steel sector; Here’s all you need to know

In a surprising development amid the rising geopolitical tensions and easing trade tensions, India proposed retaliatory measures on the US steel and aluminium imports. The retaliatory measures under the WTO (World Trade Organisation) norms against the US over American tariffs on steel and aluminium in the name of safeguard measures.

The retaliatory safeguard measures would result in an equivalent amount of duty collected from the products manufactured and originating from the US."The safeguard measures would affect USD 7.6 billion imports into the US of the relevant products originating in India, on which the duty collection would be USD 1.91 billion," a WTO communication said.

The US introduced safeguard measures in 2018 on certain steel and aluminium products, imposing 25% on steel and 10% on aluminium ad valorem tariffs. In February 2025, the US further revised the tariffs to 25% with an unlimited duration.

India’s proposal

India, in its communication to the WTO’s Council of Trade in Goods, proposed the suspension of concessions and other obligations. It said, "India hereby notifies the Council for Trade in Goods of its proposed suspension of concessions and other obligations...This notification is made in connection with safeguard measures extended by the United States of America on imports of aluminium, steel and derivative articles, vide Presidential Proclamation...dated 10 February 2025, with the effective date of 12 March 2025."

It further added "India maintains that the measures taken by the US are not consistent with the GATT (General Agreement on Trade and Tariff) 1994 and AoS (Agreement on safeguards)," it said, adding that as consultations provided for under a provision of the AoS have not taken place, India reserves the right to suspend concessions or other obligations that are substantially equivalent to the adverse effects of the measure to India's trade.

Earlier in April, India sought consultation with the US in the context of steel and aluminium tariffs imposed in February. To which the US informed the council that the tariffs are based on national security measures and should not be considered as safeguard measures.

Implications on the Indian steel sector

Amid the wave of de-escalation on the trade war front, India’s proposal for retaliatory safeguard measures may cause some discrepancy in the ongoing bilateral trade discussions between the US and India.

From the sectoral point of view, the safeguard measures could reduce the competitiveness of US steel products and could benefit the domestic steel manufacturers. However, it could also pose a challenge to the domestic steel companies if they don't pass the increased price to the buyer. If the proposal is accepted, it is expected to have a moderate impact as India’s overall steel exports are diversified as compared to global peers, thereby mitigating the impact.

Companies like Tata Steel, SAIL India will remain in focus under this development as they form a significant export share to the US. Where as JSW Steel could have less impact as it holds two manufacturing plants in the US.