Trump tariffs on steel and aluminium likely to be a double whammy for Indian producers

Donald Trump's decision to impose a 25% tariff on steel and aluminium imports is likely drive up competition for Indian exporters with producers globally looking for new markets to avoid the hit from US-duties. Analysts say this will mean Indian exports to countries such as South East Asia and Middle East will face price pressures as Chinese steel may increase outflow to these markets. The other threat is a possible rise in imports of Chinese steel to India, driving down domestic prices.

“The US tariffs on steel will increase competition and exacerbate oversupply at other steel producing markets. Indian steel producers will face increased challenges in exporting their products. Over the past 12 months, high steel imports into India have already dampened prices and earnings of steel producers in India,” said Hui Ting Sim, AVP, Moody's Ratings.

India’s steel imports stood at 6.5 million tonnes (mt) between April and November FY25 while exporting 3.2 mt of steel in the same period. India's total steel production stood at 142 mt in fiscal 2023-24.


Unlike earlier instances of country specific tariffs, Trump has decided to impose the duty on any steel coming into the United States.

According to Ritabrata Ghosh, Vice President & Sector Head-Corporate Ratings, ICRA limited, the largest steel exporters to the US are Canada, Brazil, Mexico, South Korea, Vietnam and Japan. "These countries make up almost 21% of total steel imports to the US which is at 28-29 mt," Ghosh said while adding these countries are bound to search for new markets to avoid tariffs, impacting both imports and exports of steel from India.

“Steel from Asian markets such as South Korea, Japan, Vietnam, China, around 6 mt, that was being exported to the US earlier, some part of it will end up in the Indian markets,” he said .

The Indian steel exporters are also likely to face intense competition as steel exports to the US may get diverted to markets such as Southeast Asia and the Middle East.

“India will have much more competition in its overseas steel markets such as Southeast Asia and the Middle East as China, Japan, and South Korea would try to push some of the US steel to these markets,” he added.