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India plans retaliatory tariffs against the US over auto duties


India formally informed the WTO of its intention to implement retaliatory tariffs on the US, heightening trade tensions between the two.

GENEVA: India formally informed the World Trade Organisation (WTO) of its intention to implement retaliatory tariffs on the United States (US), heightening trade tensions between the two.

The action is a direct response to US auto tariffs, which India considers unjust and detrimental to its economic interests, while simultaneously pursuing discussions for economic relief.

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The proposed tariffs will target various US products, reflecting India’s plan to shield its domestic industries from the repercussions of US trade policies. US tariffs on imports, including those from India, have negatively impacted Indian manufacturers, especially in the automotive sector.

India’s plan at the WTO seems to involve calculated litigation, which analysts suggest is designed not only to resolve disputes but also to apply pressure on trading partners. By presenting its grievances on an international platform, India might be aiming to influence negotiations with the US and other countries.

This could allow India to sidestep significant domestic reforms while negotiating with the Trump administration—a dual strategy of collaborating with the US where advantageous while confronting it when necessary.

This does raise questions about India’s sincerity in fostering a balanced trade relationship. It also faces criticism for its unwillingness to make necessary concessions that could lead to a more cooperative trading environment.

Key issues, such as US concerns regarding agriculture and digital taxation, remain contentious. India’s reluctance to address these matters suggests a desire to gain from trade without making similar compromises.

Submitting WTO complaints during ongoing bilateral negotiations with the US may risk alienating potential partners who perceive India as an opportunistic player in the global trade, but without compromising where needed.

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Utilising a multilateral platform to resolve bilateral issues hints that India intends to continue with its protectionist policies. It may also convey to Washington that it is prepared to engage in confrontational tactics. Using WTO as a bargaining tool could undermine constructive dialogue, hinting at a transactional approach to trade relations.

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