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Indian Express
3 days ago
- Business
- Indian Express
Trump doubles steel, aluminium tariffs to 50% from June 4, exporters say ‘complicates trade talks'
US steel tariffs update: US PRESIDENT Donald Trump Friday announced he would double import tariffs on steel to 50 per cent, a move that was termed 'unfortunate' by India's exporters, who said this made trade talks 'much more difficult and complicated'. Addressing a rally at a US steel plant in West Mifflin, Pennsylvania, Trump said Friday, the sharp hike in tariffs on steel from 25 per cent to 50 per cent will 'even further secure the steel industry in the United States'. 'Nobody's going to get around that,' he said. Later in a social media post, Trump said, 'It is my great honour to raise the tariffs on steel and aluminium from 25% to 50%, effective Wednesday, June 4th. Our steel and aluminium industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminium workers. Make America Great Again.' This fresh tariff hike follows a similar increase earlier this year, when Trump raised tariffs on aluminium and steel to 25 per cent. Exporters had told the Union Ministry of Commerce and Industry that exports worth $5 billion were affected. 'It's unfortunate that, while bilateral trade agreement (BTA) negotiations are ongoing, such unilateral tariff hikes are being introduced. It only makes the work of negotiators much more difficult and complicated. This will definitely impact engineering exports, which currently stand at around $5 billion under this category,' said Pankaj Chadha, Chairman, Engineering Export Promotion Council (EEPC) India. 'We urge that, since the UK has been granted exemption from Section 232, India should also be extended a similar exemption, possibly under tariff rate quota (TRQ) restrictions.' Federation of Indian Exporters' Organisation President S C Ralhan said the proposed tariff hike will have a significant bearing on steel exports, especially in semi-finished and finished categories like stainless steel pipes, structural steel components, and automotive steel parts. 'These products are part of India's growing engineering exports, and higher duties could erode our price competitiveness in the American market,' he said. The tariff hike has been implemented under Section 232 of the US Trade Expansion Act of 1962, a law that allows the President to impose tariffs or other trade restrictions if imports are deemed a threat to national security. Trump first invoked this provision in 2018 to impose a 25 per cent tariff on steel and 10 per cent on aluminium. US tariffs on steel and aluminium tend to trigger ripple effects globally. During Trump's first term, the European Union imposed restrictions on Indian exporters in response to similar US measures. Ajay Srivastava, head of think tank GTRI, said, 'The economic impact of these higher tariffs will be significant. US steel prices are already high, at around $984 per metric tonne — far above European prices at $690 and Chinese prices at $392.' He said this is expected to push prices in the US to around $1,180 per metric tonne, squeezing domestic industries such as automotive, construction, and manufacturing that depend heavily on steel and aluminium as key inputs. 'Sectors may face hundreds of dollars in additional material costs per tonne, driving up prices, reducing competitiveness, and risking job losses or inflationary pressures,' he said. 'For India, the consequences are direct. In FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related articles. These exports are now exposed to sharply higher US tariffs, threatening the profitability of Indian producers and exporters,' GTRI said in a note following Trump's announcement. India has already issued a formal notice at the World Trade Organization (WTO) signalling its intention to impose retaliatory tariffs on US goods in response to the earlier steel tariffs. With Trump now doubling the duties, it remains to be seen whether India will proceed with retaliation, potentially by increasing tariffs on select US exports within a month. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
New Indian Express
03-05-2025
- Business
- New Indian Express
Flying Under the Radar
Explainers Flying Under the Radar How India's massive drone market is serviced by smuggled Chinese drones Siddharth Prabhakar The Indian drone market is estimated to be worth $1 billion and is poised to grow massively in the next five years, with a projected value of $2.13 billion by 2027, at a compounded annual growth rate (CAGR) of around 60%. However, beneath the surface of this booming industry lies a complex web of smuggled Chinese drones, flouting Indian laws and regulations. Despite a ban on importing Chinese-made drones, they are widely available in grey markets across the country, thanks to organised gangs and semi-porous borders. These drones are smuggled from Southeast Asian countries and the United Arab Emirates by organised gangs and sold openly in grey markets across Indian cities. Massive unregistered fleet A February 2022 notification of the Union Ministry of Commerce and Industry explicitly banned the import of drones. And the Director General of Civil Aviation (DGCA), the apex regulator, does not allow the registration of foreign drones. Though not specified upfront, this is due to concerns of misuse of the recorded data, as drone servers are abroad, and the fear that the presence of foreign components in these electronics may act as malware. Buying and operating a Chinese drone is an illegal activity as per Indian law, but poor enforcement and loophole-filled regulation ensure that it flourishes unchecked. However, many Chinese drones brought into the country before 2021 have been registered with the DGCA as per rules. The presence of a massive number of unregistered drones in India is neither a secret, nor unknown to regulators. The DGCA mandates that every drone should be registered on their website before use. Every registered drone has a Unique Identification Number (UIN), which has details of its make and owner. As on April 17, only 32,000 drones from India were registered on the DigitalSky website. But experts estimate that there might be at least five lakh drones in the country, indicating that 90% of them are unregistered, likely of Chinese make. Why Chinese products dominate the market India's drone consumption is fuelled by its use in photography or recreational purposes; experts estimate this to be 80% of all drones in the country. This emerged as a fad with the advent of individual content creators on social media using drones to capture images from different angles and vantage points. In fact, since the last decade, drone photography has become an integral part of the multi-billion dollar wedding industry in India. To do so, photographers invariably pay off the police station in advance under whose jurisdiction the drone is used - to look the other way - across the country. Chinese drones are extremely popular and preferred over alternatives provided by the 100+ Indian companies listed on the DGCA website. 'Chinese drones provide better stability and safety features and higher quality photos and videos. While a DJI (Chinese tech company) drone costs Rs 1.5 lakh, an Indian drone of the same specification will cost `3.5 lakh,' said P Sarveswaran, a drone expert and researcher on their use in hydrology and environment. Drones are also used in agriculture, land survey, security and surveillance by government agencies and for defence purposes. The Greater Chennai Corporation for instance, has used drones to spray larvicide on water bodies to tackle the mosquito menace. Concerns over safety and security Proliferation of unregistered drones is a headache for enforcement agencies with complaints of snooping and videography of sensitive government facilities in Tamil Nadu. For instance, in Coimbatore, only 80 are registered, though the actual number of such flying objects might be several times more, say cops. Most drone users are unaware of rules and end up flying in restricted areas. The police have the powers to seize the gadgets and fine the owner up to Rs 1 lakh, but the sheer effort required to trace both, the drone and their human operator, is overwhelming. In August 2024, a drone enthusiast who recorded images of the Chennai international airport was apprehended by cops only because he posted them on Instagram. Customs officials, too, admit that stopping every drone bought from abroad is difficult, given the high volume of passengers. Even if detected, officials are persuaded by fliers who assure that it is only for personal use and not for commercial sale. Chennai example Chennai Customs data shows that they have seized at least 200 drones worth more than `2 crore in 2024-25. Investigators say there is evidence of drones smuggled through other airports and seaports. For instance, on April 1, 2024, Delhi Customs seized 106 DJI drones from four passengers who brought them from Hong Kong. In 2019, Directorate of Revenue Intelligence (DRI) sleuths arrested a kingpin from Ahmedabad who had smuggled thousands of drones worth several crores of rupees. A common modus operandi used by smugglers is to dismantle the drones and declare them as electronics, if probed by Customs officers. This is why the 2022 notification bans drones in Completely Built Up (CBU), Completely Knocked Down (CKD) or Semi Knocked Down (SKD) form. Well-oiled grey market So well-oiled is the grey market that an industry source says a drone can be flown in from Dubai or Bangkok within 24 hours, if one has the right contact. A simple Google search throws up results of several electronic shops in all major cities of India which sell DJI drones, spare parts and even offer servicing. Retailers in electronic hubs of cities sell it without a bill or payment of GST. While drones are also available for hire, there are several Youtube tutorials, which explain how one can hoodwink Indian Customs and smuggle them. For instance, Youtubers advise people to pack the battery in the hand baggage and the other drone parts in the check-in baggage. Way forward L Karthikeyan, a DGCA certified remote pilot instructor, acknowledges that the only way India can trump its neighbour in this trade is by innovating on technology and coming up with high-quality indigenous drones. He cited the strides made by Indian firms in development and sale of agri drones, those used in farming. These are of a higher quality and preferred over Chinese counterparts, he said. However, breaking the near monopoly of Chinese drones over the trade would require Indian drones to come up with a variant that can challenge them in photography, which is the biggest market segment. 'The Indian government has to handhold the drone industry in Research and Development (R&D) by helping with Transfer of Technology (TT) from foreign countries. The tech leaders in this field are Israel, USA, Japan, South Korea and some European countries, apart from China. The Indian government has to help in tie-ups with them. This is how Chinese drone manufacturers managed to get an edge,' Karthikeyan said.
