Trump Metals Tariffs Are On. Here's What India Can Do

Indian aluminium companies face a significant threat, as nearly 12 per cent of the country’s exports are aimed for the US, which is also the largest market for Indian exporters of the metal.

However, in steel, India will be relatively less impacted since it exports only 4-5 per cent of its production to the US. It does not figure among the top 10 countries exporting steel into US.

Interestingly, even with the addition of the new tariffs, Indian steel may have a price advantage vis-a-vis US steel. Industry experts feel a well-focused export strategy to counter likely competition from countries like Vietnam and Taiwan may work well for domestic majors who are keen to tap the US market. 

Metal Exports To The US 

The US is estimated to import some 25 million tonne of steel annually. Canada, Brazil and Mexico rank among the top three countries for steel exports in the US. While Canada accounted for 22 per cent of exports or roughly around 5.6 mt (million tonnes), Brazil had a 15 per cent share of steel exports into the US contributing nearly 3.74 mt, while Mexico had a 12 per cent share with 2.9 mt of steel exports between March 2024 and February 2025.

Out of the remaining top 10 steel providers, South Korea, Vietnam, Japan, Germany, Taiwan, the Netherlands and China together accounted for 30 per cent of US steel imports, according to recent data from International Trade Association.

India is a relatively small player in the US market for steel exports. It is therefore unlikely to be directly hit by the new tariffs. However, the US tariffs on steel is expected to lead to oversupply in other steel producing markets and some of this steel is likely to find its way to India.

Domestic companies thus face the risk of dumping, according to analysts. “There may be near-term margin pressure and exposure to dumping risk due to the imposition of additional tariffs and rebalancing of supply chains,” says Shradha Saraogi Garg, Associate Director, Corporate Ratings, Ind-Ra.

Moody's too has issued a warning over the challenges that Indian producers are facing given declining prices and lower profitability with rising steel imports over the past 12 months. Incidentally, India is considering a temporary tariff in the form of a safeguard duty of 15 per cent to 25 per cent on steel imports.

A safeguard duty would especially help reduce any influx of finished steel imports from Japan and South Korea, both of which have trade agreements with India and are therefore not subject to basic custom duties, Nikkei said in a report quoting Jashandeep Chadha, an equity analyst at brokerage Nomura. The two countries supply roughly half of India's total steel imports. 

A Window Of Opportunity  

India may be a small player in steel exports to US is concerned. However, top industry sources point out even with the latest tariffs India steel producers could still find their way into the US market if they take up a well-planned export strategy. In the US domestic prices of benchmark hot rolled coils (HRC) are hovering around US$ 950-980 per metric tonne.

India HRC prices are at around US$ 568 per metric tonne. Even after adding 25 per cent tariff India steel would remain price competitive in US market. Costlier imports will pose challenges for US downstream manufacturers as it would lead to price increases which will have to be passed on to consumers. India steel producers stand to gain if they can target this opportunity.

The main competition here would be from countries like Vietnam and Turkey. “If the USA imposes a 25 per cent flat custom duty without additional safeguards or anti-dumping duties, Indian steel mills might show a competitive edge in the US market. The current prices of steel in the US are about US$ 950-US$ 980 per tonne. India can export at US$ 580/600 f.o.b. (free on board). This is quite competitive,” said veteran steel industry expert V R Sharma, vice-chairman of Vulcan steel, part of Jindal Group said.

Seeking Alternative Markets

The impact of tariffs on domestic aluminium industry is likely to be higher than on steel. For aluminium, the US is more reliant on imports. The lighter metal is widely used across the aerospace, automobiles, construction and food packaging.

The US imports 50 per cent or nearly half of its aluminium from Canada which is the largest exporter of aluminium into the US. India, the world's second biggest primary aluminium producer, exported nearly 2 lakh tonnes of aluminium to the US, worth US$ 894.4 million, in the year to March 2024, according to government data. India ranked sixth in terms of volume of aluminium exports to US which measured close to 1.4 lakh tonne between March 2024 and February 2025. 

Domestic companies like Hindalco and Vedanta Industries are among the leading exporters. The net export value generated by the export of aluminum and its products from India was about US$ 7.7 billion in FY2024.

The tariff on aluminium is thus likely to have serious impact and lower export volumes and profitability. “The surge in tariff in the US is likely to have a relatively higher impact on export volumes and its realisation for Indian aluminium manufacturers than steel manufacturers,” CareEdge Ratings noted in a recent analysis. 

While Indian companies are likely to divert their focus towards finding alternative markets in Europe and south east Asia, the entire process would take time, metal trade experts pointed out.

Like steel, there is also apprehension of increased dumping in the Indian market as other countries try to divert their export supplies to the US.  The tariffs could also lead to a drop in global aluminum prices, which could also negatively impact India's domestic aluminum prices.

It's interesting to note that the USA is a significant importer of goods. Imposing a 25 per cent duty on imports like HRC could generate substantial revenue from import duties, potentially alleviating economic pressures.

The think tank Global Trade and Research Institute (GTRI) noted that India imports more iron and steel (excluding finished products) and aluminium products from the US than it exports. This means that if India retaliates, the US would face a bigger impact in these sectors.

(The writer is a veteran journalist. Views are personal)