Editorial – May 2025
The recent decision by US President Donald Trump to impose a 50% tariff on aluminum imports has sparked concerns among Indian exporters. India’s metal exports to the US were valued at $4.56 billion in FY2025, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminum and related goods. The increased tariff is expected to have an adverse impact on the industry, making it challenging for Indian producers to remain competitive in the US market.
The Aluminum Association of India (AAI) has expressed worry that this move will hurt Indian manufacturers, who are already under pressure from surging low-cost imports. “The 50% tariff announced by Trump will damage the Indian aluminum industry, which is already under pressure from surging low-cost imports,” AAI said. FIMI stated that the major share of Indian exports of aluminum is accounted for by the US, valuing about $946 million. A further increase in tariff is bound to have an adverse impact on Indian aluminum exports.
The Federation of Indian Export Organisations (FIEO) has also raised concerns about potential disruption to India’s aluminum exports to the US. FIEO stated that the proposed increase in US aluminum import tariffs will have a significant bearing on India’s aluminum exports, eroding price competitiveness in the American market. Indian exporters fear a loss of price competitiveness, particularly in value-added and finished aluminum products and auto-components.
India has notified the World Trade Organization (WTO) of its intent to impose retaliatory duties on US goods in response to the tariffs. However, India will refrain from initiating any action against the US while trade talks are ongoing, with the goal of finalizing an interim trade deal by July 9, 2025. The ongoing discussions are part of bilateral efforts to strengthen trade relations between the two countries.
The US is a significant destination for Indian metal exports, and the industry is likely to face challenges due to the tariff hike. To mitigate the impact, Indian exporters need to diversify their markets and invest in higher-grade value-added products. The government and industry stakeholders must work together to enhance the competitiveness of Indian aluminum products and maintain stability in the global metal trade.
By adopting a proactive approach, India can minimize the impact of the US tariffs and continue to grow its aluminum industry.
Industry experts believe that Indian exports can rise in the American market, especially after the steep hike in tariffs on $18 billion worth of Chinese goods by the US. The ongoing trade talks between India and the US may resolve the issue, but India wants to keep the option of retaliation open if the talks don’t result in a favorable outcome.