US President Donald Trump has announced a 25 percent duty on all steel and aluminum imports from India, effective Wednesday, March 12. President Donald Trump has said that the U.S. will not exempt India from these retaliatory duties, further escalating the ongoing global trade war.
The U.S. was India's largest trading partner during the financial year 2021-2024, with bilateral trade in goods amounting to about $82.52 billion during the period of April-November 2024-25, comprising $52.89 billion in exports and $29.63 billion in imports. This resulted in a trade deficit of $23.26 billion, currently favoring India.
Indian steel producers would be hit
According to Moody's Ratings, the U.S. contributes about 18 percent to India's total merchandise exports, 6.22 percent to imports, and 10.73 percent to bilateral trade. Following the announcement of the 25 percent duty, Moody's indicated that Indian steel producers would face difficulties in exporting their products to the U.S.
The impact of Trump's decision on India is debated. Experts say there is little substance to Trump's claim that India imposes excessive duties or takes advantage of tariffs. They say U.S. itself imposes high duties on various items, including dairy, fruits, and vegetables, to protect its domestic markets.
India's average duty rate stands at 17 percent, much higher than US
India's average duty rate stands at 17 percent, much higher than the U.S. average of 3.3 percent. Consequently, the 25 percent tariff on steel and aluminum imports may not substantially affect India, as it does not export large quantities of these products.
Besides, the U.S. retaliatory duties may not align with World Trade Organization (WTO) regulations. According to WTO norms, member countries are required to present their duty schedules, which include bound duty rates for all products. Trade experts suggest that while India's tariffs comply with WTO standards, the U.S. tariffs may violate these norms.
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