On March 28, India proposed to impose countervailing duties on certain goods imported from the European Union under World Trade Organization (WTO) guidelines. This proposal comes after both parties failed to reach an agreement on the European Union's restrictive security measures on certain steel products.

In a letter sent to the World Trade Organization (WTO) on March 27, India stated that it retains the right to "suspend substantial concessions or other obligations" under a provision of the EU trade and security agreement.

Impact of the Proposal

The European Union's measures will result in an annual trade deficit of $1.472 billion for India in 2023-2024, with tariff collections amounting to $368 million (at 25% tariff rate).

The communication further stated, "This measure has resulted in a cumulative trade deficit of $6.92 billion for India since July 18, 2018, with tariff collections amounting to $1.73 billion."