New Delhi: Ahead of the two-day trade talks between the US and India starting Monday, India is keeping its options open to join other affected countries in the World Trade Organization (WTO) against the steel and aluminium tariff hikes imposed by the Donald Trump administration, if it fails to secure an exemption.

Assistant US trade representative Mark Limscott will be leading a delegation of trade officials to New Delhi for inter-sessional talks ahead of the annual Trade Policy Forum meeting between the two countries later this year. India will take the opportunity to push for an exemption from the tariff hikes, like the US has granted to its key allies European Union, Argentina, Australia, Brazil, Canada, Mexico and South Korea.

“So far we have taken a neutral stand because the US is a strategic ally. Though we are not the key target of America’s tariff hikes, exports worth $300-400 million from India will be impacted, which is not a small amount. We are keeping our options open to join other impacted countries fighting the tariff hikes in WTO at an appropriate time if we fail to secure an exemption," a commerce ministry official said speaking under condition of anonymity.

According to calculations by US-based Peterson Institute for International Economics, India can retaliate against the US with $300 million of tariffs while China and Japan each are eligible to retaliate with tariffs of $700 million on US imports.

India’s commerce secretary Rita Teaotia last month said India was surprised and disappointed by the US decision to include it in a list of countries that will face higher tariffs on their exports of steel and aluminium although it is not a major exporter of these items to the US.

“Since the tariffs have been imposed on security grounds and some of the key trading partners have been excluded from that, on the basis of India’s strategic partnership with the US, we are certainly not a security threat to the US. So exemption to India should also be available on the same ground," she added.

China and the US have been engaged in a tit-for-tat trade war since president Trump’s tariff hikes on 8 March, followed by higher import tariffs on Chinese goods worth $50 billion under section 301 accusing China of stealing intellectual property of American companies. China has also slapped tariffs on goods worth $50 billion on its key import items from the US including soybeans, aircrafts and cars and has dragged the US to WTO over higher tariffs on steel and aluminium.

Trump has further instructed USTR to examine higher tariffs on another $100 billion imports from China which has been met with threats from China to retaliate in equal measure.

Though Trump’s key target has been China over its alleged unfair trade practices and with an aim to reduce its over $500 billion bilateral trade deficit, he has not spared India either with whom the US has a $20 billion trade deficit. The US challenged almost India’s entire export subsidy regime in the WTO on 14 March.

Trade minister Suresh Prabhu last month said India should not be singled out just because it is growing faster, and should be given a chance to phase out export subsidies over a period of eight years, as was the case with other countries.

A trade expert speaking on condition of anonymity said India should keep the strategic aspect of its relationship with the US separate from the commercial aspect. “We should not hesitate to drag the US to the WTO over our business losses due to higher steel and aluminium tariffs rather than waiting for others to take the lead," he added.

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