India’s steel secretary Sandeep Poundrik has downplayed the impact of these tariffs on the local industry. However, a lobby of domestic steelmakers has raised alarm bells on concern that many major US steel suppliers could divert their production to other markets, including India.
US President Donald Trump said on Monday that the US will levy a 25% tariff on all its imports of steel and aluminium starting 12 March.
India will be a prime target for overseas exporters, given the country’s growing appetite for steel, said Naveen Jindal, president of the Indian Steel Association (ISA), a lobby of domestic mills. He is also chairperson of Jindal Steel & Power.
More imports will not only dent the sales growth of domestic steelmakers but force them to drop prices, pinching their margins, because such imports tend to be priced much lower than what is produced locally.
“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.
India’s steel imports grew 22% to 9.2 million tonnes in 2024 from the previous year, led by a surge in imports from China and Japan. This made India – the second-largest producer of steel globally – a net importer of the alloy.
However, Poundrik said the domestic market for steel was “strong” and that India’s steel exports to the US were minimal.
“We produced 145 million tonnes of steel last year, of which 95,000 tonnes was exported to the US. So, how does it matter if out of 145 million tonnes, you are not able to export 95,000 tonnes,” he was quoted as saying by PTI.
Some merit
However, he admitted that India’s overall exports of steel may come under pressure if more countries implement safeguard measures and trade restrictions.
Analysts took a more measured view of the situation. While direct steel exports from India to the US were negligible, there was merit to the steel industry’s concern that some steel could be diverted from the US market to India, said Dhruv Goel, chief executive officer at BigMint, a market intelligence firm.
“Canada, Mexico and Brazil, which are the largest suppliers of steel to the US, trade at very high prices. These countries won’t be able to sell elsewhere in the world so easily, especially not in India,” Goel said.
Prices of steel in the US are at a premium of $100-150 per tonne to global prices, which hover at about $550-600 per tonne, he said.
“But other exporters to the US like South Korea, Japan, Vietnam and Taiwan may be able to divert their excess production to India. They already have an established market here,” he said.
The US, the world’s largest importer of steel, bought 22.2 million tonnes of steel from overseas in 2024, as per data from BigMint. More than half of this came from its top three suppliers – Canada, Mexico and Brazil. South Korea, Japan, Vietnam and Taiwan cumulatively accounted for another 5.2 million tonnes – almost a quarter of US’ steel imports. India accounted for less than 1% of US’ steel imports.
The ISA called for diplomatic intervention by New Delhi to seek exemptions for India. Trump told the media on Monday that the new tariff will apply across the board with “no exemptions, no exceptions.”
The S&P BSE Metal Index cumulatively lost 4.7% over the past two sessions. Stocks of Indian metal companies nosedived on Monday and Tuesday – Tata Steel (5.9%), Vedanta (7.4%), JSW Steel (2.7%) and Jindal Stainless (4.5%).
The latest development adds to the misery of steel companies that were already miffed due to the less-than-expected increase in the Indian government’s capital expenditure outlay for FY26. The finance ministry budgeted ₹11.2 trillion for capex in the next fiscal compared with ₹11.1 trillion budgeted in FY25. The expenditure for FY25 was revised downward to ₹10.2 trillion.
Robust capex
“On steel capex, a slowdown in demand growth can be expected,” said Priyankar Biswas, associate director at BNP Paribas and an India market industrials, logistics and metals equity research analyst. He added that already in December, consumption growth has moderated to 3%.
“If there is a lack of capex, then at current run rates, we may witness 5% volume growth in CY25, which is below the double-digit growth we witnessed in CY23 and CY24,” he said.
Earlier, Sajjan Jindal, chair of JSW Steel, the largest domestic steelmaker, said that the government’s capex budget of ₹11.2 trillion was lower than the ₹13 trillion he expected based on past trends.
“But still, capex spend is at a robust level and will give a boost to the core sectors,” he said on social media platform X.
Domestic steel prices have dropped to a four-year low. Benchmark hot-rolled coils (HRC) of steel cost an average of ₹46,567 ($536) per tonne in January, 14% lower year-on-year, according to data from BigMint.
