India plans retaliatory duties on US goods in hardening stance

India has threatened to impose levies on some US goods in retaliation to Washington’s higher tariffs on automobiles and their components, signaling a tougher stance by New Delhi even as the two nations race to seal an interim trade deal.

US’ safeguard measures would hit $2.9 billion imports annually from India with $723.75 million in duties. “Accordingly, India’s proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the US,” according to a notification sent to the World Trade Organization.

The South Asian nation has argued that the higher tariffs are “safeguard” measures designed to shield the US industry, and impact Indian exporters unfairly.

The nations are close to finalizing an interim trade agreement before a July 9 deadline when higher US tariffs kick in. US President Donald Trump said that Washington would start notifying trading partners of the new US tariffs on their exports effective Aug. 1.

The move follows India’s more assertive stance over the last few weeks. The South Asian nation is unwilling to sign a deal that doesn’t address both sectoral access and reciprocal tariffs on its exports, Bloomberg News earlier reported. New Delhi has also pushed back against Trump’s assertions that trade was used to broker a recent ceasefire with Pakistan.

Last month, India had formally escalated its challenge by seeking consultations with the US at the World Trade Organization over the 25% American tariffs on passenger vehicles, light trucks and certain auto parts.