India to postpone retaliatory tariff worth of $235 million against the Trump administration

India is found compassionate towards the United States agreeing to defer its heavy duties on US$ 235 million worth of 29 American goods by 45 days from August 4, upon a request by the US, sources said. This countermeasure by India was a retaliatory act against the Trump administration’s decision to impose additional 25 per cent and 10 per cent tariffs on India’s aluminium and steel supplies to the US.

However, deferring this retaliatory move is expected to substantially de-escalate a tariff war between India and the US. It indicates New Delhi would further engage Washington to find a more meaningful outcome to the ongoing bilateral trade negotiations. India is hopeful that this move would finally bring them a relief from those extra metal tariffs levied by the Trump administration.

The commerce ministry has asked the revenue department to amend the latter’s June notification on proposed duties on US products, said a senior official. But analysts suggested that India should wait until both the countries meet in September to hold the so-called 2+2 strategic and defence dialogue.

In the meanwhile, New Delhi has also asked for a waiver from the US, although the latter said it would consider the exemption only if New Delhi offers an acceptable proposal to lower its steel supplies to the United States. India, however, is unwilling to accede to such a demand, claiming that its supplies are already limited, sources said.

Jayant Dasgupta, former Indian ambassador to the World Trade Organisation, is also of the opinion that delaying the retaliation is now the best option until both the countries find a more meaningful outcome.