Union minister for steel and heavy industries H.D. Kumaraswamy on Tuesday said the government will “wait and watch” how Donald Trump’s 25% tariffs on steel and steel products affect Indian businesses and then devise a trade strategy.
There is no clarity on the nature of tariffs to be imposed by the US, the minister said, speaking to reporters on the sidelines of an automotive industry event in New Delhi, adding that India would ready a trade strategy once the details are known.
In February, the US removed the tariff exemptions or preferential market access provided to Canada, Brazil, Mexico, South Korea, Japan, Argentina, Australia, Ukraine, and the European Union (EU) and announced a flat 25% levy for all countries, effective 12 March.
Steelmakers and experts have contended that this hike in trade barriers is likely to encourage steel dumping into India, as it is one of the few jurisdictions with minimal trade restrictions on the metal.
But steel secretary Sandeep Poundrik has stated that this tariff is unlikely to have a major impact on India, as the country’s domestic demand for steel is robust and only a fraction of Indian-made steel is exported to the US.
Rating agency Icra has clarified that the aftershocks of this new trade barrier will be felt in the Indian steel industry. Japanese and South Korean steelmakers, which have enjoyed preferential access in the US to date, are likely to try and sell their products in high-growth markets such as India, especially at a time when these two countries rank among the top three steel exporters to India, commanding about 40-55% of India’s finished steel imports.
“This can exert pressure on domestic steel prices, pulling down the industry’s earnings further in FY26,” Icra said in a statement on 12 February.
Indian steelmakers have echoed this sentiment and sounded a note of caution over potential dumping in India, which could pull prices further down and make the country’s steel sector less competitive.
“The Indian Steel Association (ISA) expresses deep concern over the US decision to impose tariffs on steel imports. This latest tariff is expected to slash steel exports to the US by 85%, creating a massive surplus that will likely flood India, which is one of the few major markets without trade restrictions presently,” said Naveen Jindal, president of the ISA, and chairman of Jindal Steel and Power Ltd in February.
But Icra also highlighted an opportunity for Indian steelmakers amid the trade barriers. With the US ending the preferential market access regime and creating a level-playing field, low-cost Asian steel makers may have an advantage over pricy steel exporters such as Canada, Brazil, Mexico, and the EU, Icra said.
“This opens the possibility for Indian mills to nibble at a part of this large opportunity and increase their export footprint in the US, which, as of now, accounted for a minuscule 2-3% of India’s overall steel export basket,” said Girishkumar Kadam, senior vice-president and group head, corporate sector ratings, Icra, in the 12 February statement.
