Threat of US tariffs, global uncertainty pulls down India’s engg exports in February: EEPC

Steel, aluminium exports dip before tariffs kick in

India’s engineering exports dipped 8.6 percent in February to $9.1 billion, a month before steel and aluminium tariffs imposed by the US President Donald Trump kicked in, according to Engineering Exports Promotion Council, India.

"The year-on-year decline in February 2025 was mainly driven by a 58 percent decline in exports of aluminium and products and a 40 percent decline in exports of iron & steel. Exports of ‘ships, boats and floating structures’ and ‘aircraft, spacecraft and parts’ also recorded a noticeable decline during this period," said Pankaj Chadha, chairman, EEPC India.

India counts the US as one of the major importers of its engineering products. In February, US was followed by UAE and Saudi Arabia as top export destinations.

While Indian exports found a market in Europe—exports to France were up 67 percent and UK witnessed a 32 percent rise—China and Russia’s share fell further.

Exports of the category to China were down 11.9 percent over the previous year.

The US tariffs on steel and aluminium kicked in on March 12 and are likely to disrupt global trade.

India, last week, imposed a 12 percent safeguard duty on certain steel products to protect the local industry from more imports. The Indian industry had to face the brunt of cheap imports after the US had imposed a levy on steel and aluminium during President Trump’s first term in office from 2016 to 2020.

“The Indian engineering industry is bracing itself for two different impacts in case the higher US tariffs become effective. Firstly, the loss of the US market which is also the largest engineering export destination for India, and secondly, trade diversion that may happen due to this from China, Japan, South Korea, and Southeast Asian nations,” EEPC said.

The EEPC chairman also lent support to India’s plan to diversify and sign new FTAs and negotiate a bilateral trade agreement with the US.

India is to hold talks with the US on trade agreement from March 25-27.