NEW DELHI — India is preparing a strategic and assertive response to the United States’ proposed 26 percent blanket tariff on Indian goods, escalating a standoff that has now landed at the doors of the World Trade Organization. The Narendra Modi government on Friday notified the WTO of its intent to impose retaliatory tariffs worth $725 million on a selection of US products, triggering a significant trade flashpoint just days ahead of a July 9 deadline.
Indian officials are also engaged in high-level backchannel communications with their American counterparts to de-escalate tensions. As reported by the Economic Times, India has signaled willingness to lower tariffs on a limited set of non-sensitive American goods such as medical equipment and electronics, while firmly refusing to compromise on agriculture and dairy access. Trade analysts note that this balancing act is aimed at salvaging semiconductor and critical mineral agreements currently under discussion. Meanwhile, diplomatic sources say India has been consulting BRICS allies to draft a joint statement condemning the use of punitive economic measures by Western powers.
This announcement comes in reaction to the Trump administration’s proposal to significantly raise duties on Indian auto imports and other goods, citing unresolved trade deficits. According to FastBull, India is targeting a list of US goods that could be subject to tariffs in line with WTO authorizations. The list remains classified but is expected to cover a range of industrial and consumer exports.
India’s Ministry of Commerce stated that its WTO filing aligns with procedural norms under the global trade body’s rules on retaliatory action, confirming that the $725 million in proposed duties reflect calculated economic injury from the US tariffs. As reported by Reuters, an unnamed Indian official emphasized that the country remains open to dialogue but will not accept terms that undermine key domestic sectors. The official added that all measures being considered are rooted in WTO-authorized remedies.
While Indian officials prepare to face Washington at the WTO, Prime Minister Narendra Modi is conducting high-level trade and defense talks in Latin America. During his recent stop in Brazil, Modi reiterated India’s ambition to deepen South-South cooperation, particularly in sectors like space, defense, and agri-tech. As reported by The Hindu, his meetings with Brazilian President Luiz Inácio Lula da Silva also included discussions about a coordinated BRICS position on unilateral Western trade actions.
In Buenos Aires, Modi signed preliminary trade cooperation agreements with Argentina, signaling New Delhi’s intent to diversify trade partnerships amid Western pressure. According to The Federal, these agreements include provisions for agricultural exports, joint manufacturing, and new maritime logistics corridors.
The broader context is India’s deepening dissatisfaction with Western trade policies, especially Washington’s increasing use of protectionist tariffs. In its filing at the WTO, India argued that the proposed 26 percent tariff would violate global trade norms and cause disproportionate economic harm. It has asked for permission to implement retaliatory duties on US goods until the matter is fully resolved.
The Firstpost explained that India is leveraging its growing defense ties with Brazil to present a united front against economic coercion. The Indian Air Force and Brazil’s aerospace giant Embraer have already begun talks on joint development of light transport aircraft and air defense systems. These moves are seen as part of a broader push to create autonomous supply chains among emerging economies.
As the July 9 deadline looms, India is making its diplomatic options clear. Either the US backtracks on its tariff threats and engages in a balanced deal, or it will face counter-tariffs that could harm American exporters in crucial sectors. According to a report by Reuters, Indian officials maintain that the tariffs are calibrated to reflect economic harm caused by US protectionist measures and are being pursued within the framework of the WTO’s legal remedies.
This episode underscores how India, once cautious in its trade posturing, is now embracing a more confident, rules-based retaliation strategy. It is also an inflection point in India’s foreign policy approach, which increasingly leans on multilateralism outside of Western alliances.
Whether the US chooses compromise or confrontation remains uncertain. What is clear is that India’s WTO-backed retaliation marks a significant evolution in its trade diplomacy and signals its willingness to challenge the economic dominance of Washington through structured, rules-based channels.
