India's negotiation strategy with the US has undergone significant changes! WTO documents show that it will impose additional tariff on the US

After China and the US reached an agreement on substantial mutual tariff concessions, the atmosphere of trade negotiations between some countries and the US seemed to have undergone subtle changes.

According to a notification submitted by India to the World Trade Organization (WTO) on Monday, India proposed to impose import tariffs on certain US-made goods in response to the 25% tariffs previously imposed by the US on Indian steel and aluminum products.

The document, published on the WTO's official website, stated that India hereby notified the Council for Trade in Goods of its proposed suspension of concessions and other obligations with respect to the US... This notification is related to the protective measures announced by the US in February this year on imports of aluminum, steel, and their derivatives. The form of the suspension of concessions includes imposing additional tariffs on certain US products.

India also pointed out that the US government's tariffs on steel and aluminum would affect Indian exports to the US worth $7.6 billion, and the total scale of tariffs imposed by the US on India would reach $1.91 billion. India may suspend concessions to the US 30 days after the date of this notification.

Change in negotiation strategy?

According to the WTO, the letter was received on May 9 (last Friday) and is now being distributed at the request of the Indian delegation. India will inform the Council for Trade in Goods and the Committee on Safeguards of its next steps.

In April this year, India held consultations with the US on these tariffs under the WTO's Agreement on Safeguards, but the US stated to the WTO at that time that its decision to impose tariffs was based on national security grounds and should not be considered a trade protection measure.

This tough stance seemed to have forced India to consider significantly reducing its tariffs on the US. Last week, two sources revealed that India proposed to reduce the tariff gap with the US from the current 13% to below 4% in exchange for the US granting India exemptions from current and future tariffs, which represented a significant adjustment in India's trade policy.

Last week, an Indian official also stated that following the UK, India and Japan would be the next two countries to finalise agreements. To achieve this goal, the Indian side has proposed reducing tariffs to zero in the first phase of the agreement under negotiation. In addition, India will also relax import controls on several high-value US products, among other measures.

However, the document distributed by the WTO on Monday indicated that India's attitude towards trade negotiations with the US seemed to have changed to some extent. This proposal is undoubtedly significant as bilateral trade negotiations between the two countries are ongoing, and the Indian team is also set to visit the US this week.