Nearly $1 billion of Indian exports at risk as Trump plans tariff on steel, aluminium imports

Trump's tariff threat to impact $1 billion of steel and aluminum exports

US President Donald Trump’s plan to impose a 25 percent tariff on all steel and aluminium imports into the America could threaten nearly $1 billion worth of Indian exports, according to an analysis by Moneycontrol.

India’s steel export to the US are a minor fraction of the total steel exports, and the US accounts for only 5 percent of the total exports from India.

The aluminium industry, however, faces a more significant threat, as nearly 12 percent of the country’s exports are aimed for the USA.

Until November 2024, India's aluminium exports to the US at $777 million were 11.5 percent of the country’s total exports of $6.7 trillion in 2024.

However, there may some silver lining, as a similar decision by President Trump during his first term in office in 2018 didn’t have much impact on India's aluminium export.

America's share in India's total exports has hovered around 11-15 percent over the last decade.
While the US decision is expected to hurt Japan, Europe, Canada and Mexico more, data shows that India may not be completely immune to second-order effects, as oversupply may bring prices down further, thus hurting Indian steel manufacturers.

“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,” Hui Ting Sim, AVP, Moody's Ratings.

While India’s iron and steel imports have declined 4 percent, China and Indonesia’s share in iron and steel imports has increased. China’s iron and steel imports were up 20 percent in 2024, while Indonesia’s were up 10 percent compared with the previous year. Vietnam’s imports of iron and steel to India also doubled in the first six months of FY25, making it the fifth largest steel importer for India, from 19th rank two years ago.

On the other hand, steel imports from the US were down 25 percent. India runs a trade deficit with the US regarding iron and steel.

Prime Minister Narendra Modi is set for a bilateral meeting with President Trump this week, with tariff concessions likely on agenda. Some reports suggest India may offer more tariff cuts to America, in addition to the ones made in the Budget 2025.