Nearly $1 billion in Indian exports at risk as Trump plans steel, aluminum tariffs

US President Donald Trump’s plan to impose a 25 percent tariff on steel and aluminum imports could put nearly $1 billion worth of Indian exports at risk, according to an analysis by Moneycontrol.

While steel exports to the US make up only a small portion of India's overall steel shipments—accounting for just 5 percent—India’s aluminum industry faces a bigger threat. The US is a key market, receiving nearly 12 percent of India’s aluminum exports.

Impact on India’s Aluminum Exports

In the first eleven months of 2024, India exported $777 million worth of aluminum to the US, making up 11.5 percent of the country’s total exports, which stood at $6.7 trillion in 2023. If the proposed tariffs are implemented, Indian aluminum exporters could experience significant disruptions.

However, history suggests a potential silver lining. A similar tariff decision by Trump in 2018 had little impact on India’s aluminum exports, raising hope that the industry might weather this storm as well.

Steel Industry Faces a Tougher Battle

The steel sector, already dealing with price pressures, could suffer further setbacks. Analysts warn that while the US decision will primarily impact Japan, Europe, Canada, and Mexico, India could feel secondary effects due to global oversupply and price declines.

“Indian steel producers will face increased challenges in exporting their products. Over the past year, high steel imports into India have already dampened prices and earnings for domestic steelmakers,” said Hui Ting Sim, AVP at Moody’s Ratings.

Rising Competition from China, Indonesia, and Vietnam

India’s iron and steel imports declined by 4 percent in 2024, but competition from other Asian markets has intensified.

China’s iron and steel exports to India surged by 20 percent in 2024.

Indonesia’s exports grew by 10 percent.

Vietnam’s steel exports to India doubled in the first half of FY25, making it the country’s fifth-largest supplier, up from the 19th rank two years ago.

In contrast, steel imports from the US to India dropped by 25 percent, further shifting trade dynamics. India currently runs a trade deficit with the US in iron and steel.

India-US Trade Talks on the Horizon

With Prime Minister Narendra Modi set to meet President Trump this week, trade negotiations are expected to take center stage. Reports suggest India may consider additional tariff reductions for US goods, building upon those announced in the Budget 2025, in an effort to ease trade tensions.

India’s overall exports to the US have consistently accounted for 11-15 percent of total exports over the past decade, making the outcome of these discussions crucial for multiple industries.