India is actively pursuing measures to address trade distortions on multiple fronts, reflecting a complex interplay of liberalization efforts and rising protectionism. These measures come in the wake of increasing global trade tensions and aim to protect domestic industries while ensuring fair trade practices.

One significant development is India's recent imposition of a temporary 12% safeguard duty on certain steel imports, effective from April 22, 2025. This move primarily targets inexpensive imports from China. It will remain for 200 days and may be amended, revoked, or extended as needed. This decision, which follows a comprehensive investigation that began in December 2024 under the WTO Safeguard Measures Agreement, highlights India's commitment to protecting its domestic steel industry, especially hot-rolled and cold-rolled steel products crucial for the construction and automotive sectors. The duty applies to imports from all countries, even though Chinese steel accounts for about 25% of India’s total steel imports.

The reasons behind this steel tariff are rooted in rising import concerns. India has been a net importer of finished steel for the past two years, with imports reaching a nine-year high of 9.5 million tonnes in FY24/25. This surge in imports has created significant pressure on domestic manufacturers, with a notable price disparity between imported and domestically produced steel. Chinese steel sells for approximately $520 per tonne, while Indian production costs are around $610 per tonne. The Directorate General of Trade Remedies (DGTR) has calculated the dumping margin at 18-22%, creating unsustainable market dynamics for local producers.

India's efforts to tackle trade distortions also involve broader policy measures aimed at enhancing trade facilitation and competitiveness. The implementation of the National Logistics Policy and various digital initiatives are proactive steps to reduce logistics costs and improve overall trade efficiency. These measures align with India's goal of integrating more actively into Global Value Chains (GVCs), which is seen as crucial for boosting domestic competitiveness and attracting greater foreign investment. The World Bank’s Logistics Performance Index reflects this progress, with India rising to 38th position in 2023.

However, India's trade policy stance also reflects a resurgence in protectionist measures, including increased tariff and non-tariff barriers, which restrict the country's trade openness. This trend is evident in the recent reciprocal tariffs imposed by the United States, with tariffs of up to 27% on Indian goods, impacting key sectors like steel and auto. While these measures aim to protect US manufacturing and reduce the trade deficit, they pose significant challenges for Indian businesses due to higher export costs and potential reductions in demand from American consumers.

Despite these challenges, India continues to engage in trade negotiations and forge Free Trade Agreements (FTAs) with countries such as the United Arab Emirates (UAE) and Australia, indicating a strategic move towards preferential trade arrangements. These agreements are aimed at diversifying exports and enhancing market access for Indian products.

Furthermore, India has raised concerns about global trade practices, particularly in agriculture. India has been vocal about addressing food security needs and supporting its farmers, a large and politically influential constituency. Recent figures put India's support measures at $48 billion, the highest in the WTO. India also maintains significant price support for rice and wheat through “public stockholding,” a practice that involves acquiring stock from farmers at set prices, retaining those stocks to maintain steady prices and supply, and providing those food grains to low-income households at subsidized costs.

In navigating the complexities of global trade, India seeks to balance its commitment to liberalization with the need to protect domestic industries and address trade distortions. The country's multi-faceted approach involves implementing safeguard measures, enhancing trade facilitation, engaging in trade negotiations, and advocating for fair trade practices within the WTO framework.