New Delhi [India], June 2 : While facing a challenge from the United States regarding tariffs on steel and aluminium, the Global Trade Research Initiative (GTRI) suggests that India should opt for a more "pragmatic route" by using the ongoing bilateral Free Trade Agreement (FTA) as a tool for negotiations with the US.
GTRI believes that India could secure a mutually beneficial negotiated solution by pressing the US to eliminate or significantly reduce the Section 232 tariffs on steel and aluminium as a key component of the FTA deal.
"This approach would allow India to use its negotiating leverage to gain meaningful market access benefits without escalating the dispute through trade or legal fights at this stage, the release by GTRI said.
However, this strategy is particularly relevant as India and the US are currently deeply engaged in FTA talks.
Last week, President Trump announced a 50 per cent duty on imports to the US for steel and aluminium from June 4, 2025.
Earlier US has rejected India's petition at the World Trade Organisation (WTO) on May 23, claiming that US steel and aluminium tariffs are not safeguard measures under WTO rules.
The U.S. argues these tariffs are imposed under Section 232 for national security reasons, falling under Article XXI of GATT, not the Safeguards Agreement. This makes India's proposed suspension of concessions under the Safeguards Agreement legally invalid.
Following the US's rejection of India's proposed retaliation on both legal and procedural grounds, the country has other options as well.
One of them being, imposition of retaliatory tariffs on the US, which will "send a clear message, but it also brings the risk of U.S. countermeasures and possible legal battles", GTRI said. "Other countries like the EU, Canada, and China have done this against the U.S. Section 232 tariffs as a political signal of resistance."
Other options include pursuing a WTO dispute challenging the US's invocation of the national security exception, although this carries risks due to the US's past disregard for WTO rulings on such grounds and the non-functional Appellate Body.
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