The recent announcement that the United States will double tariffs on steel and aluminium imports from 25% to 50% has sent ripples across global trade markets, posing a significant challenge to India’s export economy. This drastic hike, effective from June 4, 2025, threatens to disrupt India’s thriving engineering goods sector, which exports around $5 billion worth of products annually to the U.S.
Experts warn that the tariff increase could undercut India’s competitiveness in the American market, especially for products reliant on steel and aluminium inputs. Key segments such as auto components, stainless steel pipes, and structural steel goods stand to face the brunt of these duties, risking reduced orders and potential revenue losses for Indian exporters.
While Indian Steel Minister HD Kumaraswamy has pointed out that India’s direct steel exports to the U.S. are limited, the broader impact could be felt indirectly. Countries affected by these tariffs may redirect their exports elsewhere, intensifying competition in global markets, including India’s. This could lead to increased pressure on Indian manufacturers to find new buyers or absorb the cost burden, affecting profitability.
In response, India has lodged a formal complaint with the World Trade Organization (WTO), emphasizing the need for fair trade practices and adherence to global trade rules. This move signals India’s determination to protect its export sector from disproportionate tariff barriers and maintain a level playing field.
Market reaction has been immediate and noticeable. Shares of leading Indian steel and aluminium companies, including Tata Steel, have seen declines amid concerns about the potential fallout. This underlines investor apprehensions about the tariff’s ripple effects across the industry and the wider economy.
The doubling of tariffs serves as a stark reminder of the fragility of global trade relationships in a world of rising protectionism. For India, it is a call to diversify export markets, enhance domestic value addition, and strengthen diplomatic channels to navigate these turbulent waters.
As India braces for these challenges, policymakers and industry leaders must collaborate closely to mitigate risks and sustain the growth trajectory of the engineering goods sector. The road ahead demands resilience, innovation, and strategic engagement on international trade platforms to safeguard India’s economic interests in an increasingly complex global marketplace.
