NEW DELHI: US President Donald Trump’s announcement that he plans to impose a 25% tariff on all steel and aluminium imports is expected to have a ripple effect on the global steel market, potentially increasing the threat of steel dumping in the country, according to domestic steel manufacturers.
Industry executives said that while India is not among the top steel exporters to the US, the move is likely to force countries with higher export exposure to the US — such as Canada, Mexico, Brazil, and South Korea — to seek alternative markets, with India being a primary destination.
Industry executives added that this could lead to an oversupply situation in India, further pressuring domestic steel prices that are already under strain due to rising imports from China. “The US, a major steel importer, has historically imposed strict trade restrictions, with over 30 remedial actions in force against Indian steel — some for more than three decades. This latest tariff is expected to slash steel exports to the US by 85%, creating a massive surplus that will likely flood India — one of the few major markets without trade restrictions presently,” said Naveen Jindal, president, Indian Steel Association (ISA).
Analysts echoed similar concerns, adding that while direct Indian steel exports to the US are relatively small, the indirect impact from redirected exports could be substantial. “India is not among the top steel exporters to the US. Countries like Mexico, Canada, Brazil, and even Vietnam will be more affected. However, these countries may now look to India for their steel exports since very few markets have high steel demand like the US and India,” said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
As a result, domestic steel companies could see further pricing pressure. Already, steel company stocks dipped between 2-4% on Monday following Trump’s statement, reflecting negative sentiment in the market. Steel industry executives fear this could cause domestic steel prices to remain soft or even decline further, impacting domestic steel manufacturers.
According to Niladri Bhattacharjee, partner and metals & mining industry leader at Grant Thornton Bharat, “India can potentially export about 10 MTPA to the USA of special grade steel, stainless steel, and some grades of flat steel. In 2023, India exported about 9 MTPA of steel to the USA. In 2024, 0.3 MTPA of Indian steel exports to the USA was allowed waiver from any tariffs. The tariff reimposition will indeed affect direct Indian exports to this quantum”.
Additionally, Bhattacharjee pointed out that a steel glut in Europe, exacerbated by US tariffs, could impact Indian exports indirectly. “Our primary aluminium exports to Mexico, the Netherlands, and other European nations, totaling about 0.6 MTPA, may come under stress,” he noted.
South Korea, one of the major steel exporters to the US, has already signaled its intent to look for alternative markets. According to a Bloomberg report, South Korea’s steel exports to the US are now only 70% of what they were in the 2015-2017 period, and redirection to other markets, including India, is likely.
India currently imposes a basic customs duty of 7-8% on various grades of imported steel, significantly lower than the newly imposed 25% US tariff. The ISA has urged the government to push for diplomatic action to secure exemptions from restrictive measures and seek relief from longstanding anti-dumping and countervailing duties.
“With the US shutting its doors to global steel, the surplus will inevitably be redirected to India, threatening our domestic industry with market distortions, price crashes, and unfair competition,” Jindal said.
Meanwhile, Indian companies with manufacturing operations in the US, such as Hindalco Industries’ subsidiary Novelis and JSW Steel, could benefit from the tariffs. Novelis, which operates a major facility in Alabama, is a key supplier for the beverage packaging, automotive, and aerospace industries.
Source: The Financial Express
Mexico Shows How To Deal With Trump’s Bullying Tactics In A Dignified Manner 