Trump's 50 per cent tariff on steel and aluminium imports threatens India's $5 billion export sector: Experts

Time of India

3 days ago

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India's engineering exports are likely to face significant challenges following US President
Donald Trump
's decision to impose a 50 per cent tariff on foreign steel and aluminium imports, according to the Engineering Export Promotion Council of India (EEPC).
The new tariff, set to take effect from June 4, 2025, will apply to steel, aluminium, and their derivatives, doubling the existing duty. Steel and aluminium products constitute around 25 per cent of India's engineering exports to the US. 'The annual export of steel, aluminium and their derivatives to the US currently stands at around USD 5 billion,' said the EEPC.
The EEPC noted that the earlier 25 per cent tariff on steel imports had already created considerable difficulties for Indian exporters.
'In case the US goes ahead with its plan and imposes a 50 per cent tariff on steel, aluminium and their derivatives, exports of these key items will become costlier, leading to a likely dip in shipments,' said Pankaj Chadha, chairman, EEPC India.
Though India's direct steel exports to the US are relatively modest, the Trump tariff has disrupted global trade patterns by intensifying international competition and affecting prices.
While the UK managed to secure exemptions from the 25 per cent tariff through a bilateral trade agreement, the EEPC urged India to seek similar relief during the ongoing bilateral trade agreement (BTA) discussions with the US.
"This is perhaps not the opportune time to introduce such unilateral tariff especially when BTA negotiations are going on. It can make the work of the negotiators tricky. The proposed tariff increase by the Trump administration is likely to impact the engineering exports which are about USD 5 billion under this head," added Pankaj Chadha added.
The Aluminium Association of India (AAI) also voiced concern over the US decision, warning that doubling the aluminium import tariffs would hurt Indian manufacturers already struggling against low-cost imports. On May 30, President Trump announced the increase in aluminium tariffs from 25 per cent to 50 per cent, also effective from June 4.
'The 50 per cent tariff announced by Trump will damage the Indian aluminium industry, which is already under pressure from surging low-cost imports,' the AAI said in a statement.
Aluminium is a strategically important metal for sectors such as defence, aerospace, telecommunications, energy transition, power and construction. The AAI pointed out the rising influx of primary aluminium and low-quality scrap into India and called for protective measures similar to the recent 12 per cent provisional safeguard duty imposed on certain steel imports.
The association highlighted that the aluminium industry has invested over Rs.
1.5 lakh crore to build a domestic production capacity of 4.2 million tonnes per annum (MTPA), and deserves similar safeguards.
B K Bhatia, Director General of the Federation of Indian Mineral Industries (FIMI), noted that the US accounted for $946 million of India's aluminium exports. 'We are hopeful that this issue will get resolved during ongoing trade negotiations between India and USA,' he said.
In 2024-25, India's exports to the US under this category comprised $587.5 million in iron and steel, $3.1 billion in articles of iron and steel, and $860 million in aluminium products, totalling $4.56 billion.
The latest tariff hike falls under Section 232 of the US Trade Expansion Act of 1962, which allows the US President to impose duties if imports are deemed a threat to national security. President Trump had previously imposed a 25 per cent tariff on steel and a 10 per cent tariff on aluminium in 2018, later raising aluminium tariffs to 25 per cent in February 2025.
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