Trump's Tariffs Invoke Fear Of Excess, To Further Weaken Steel Prices For Indian Producers

US President Donald Trump's additional 25% tariff announcement on all steel and aluminium imports has sparked fears of dumping and further weakening of prices for Indian producers.

The Indian Steel Association, a lobby of India's major steel producers, has said it is "deeply concerned" over the decision, and urged the government to "push for removal of longstanding anti-dumping and countervailing duties and secure exemptions from restrictive measures".

"Tariffs could lead to massive surplus that will likely flood India. India’s carbon steel exports to US are negligible due to longstanding anti-dumping and countervailing duty measures. This decision will add to the misery, aggravate the situation further," said Naveen Jindal, president, Indian Steel Association, adding the tariffs could lead to market distortions, price crashes, and unfair competition for India.

However, at an event on Monday, Steel Secretary Sandeep Poundrik said the direct impact of tariffs on India would be negligible.

"How much steel do we actually export to the US? 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," Poundrik said at an event organised by Bengal Chamber of Commerce and Industry, as reported by PTI.

According to Moody's Ratings, US tariffs on steel will increase competition and exacerbate oversupply at other steel producing markets.

"Indian steel producers will face increased challenges in exporting their products. Over the past 12 months, high steel imports into India have already dampened prices and earnings of steel producers in India," said Hui Ting Sim, AVP at Moody's.

Nomura, too, believes that emerging Asian economies like India, Thailand and China are at risk of higher reciprocal tariffs due to higher relative tariff rates on US exports, compared to developed economies such as South Korea and Singapore, who have have FTAs with the US and are less at risk.

"By sector, Asia imposes higher tariffs on agricultural products and transportation. The former is politically difficult for Asia to lower, but countries could lower their tariff rates on the transport sector, which includes motor vehicles... We expect Asian economies to step up their negotiations with Trump. India is considering reducing tariffs on over 30 items and preparing to increase purchases of US defense and energy," Nomura said in a note.

Another industry body, the Indian Stainless Steel Development Association, added that Indian stainless steel exports would face severe obstacles, escalating costs for manufacturers, consumers if and when the tariffs are imposed.

"The tariffs represent dual blow to India – limiting market access while escalating global competition. Imposition of further trade barriers would stifle growth, hamper job creation, and strain bilateral trade relations," said ISSDA President Rajamani Krishnamurti.

Meanwhile, Abhyuday Jindal, MD, Jindal Stainless has also sought clarity on coverage of Trump’s tariff threats.

"Even now, Indian exports are subjected to 25% tariffs under Section 232. However, there is a mechanism in place wherein importers can file for exclusion. Based on the strategic pact signed between India and the US, up to 70% of the exclusion requests are to be considered favourably by the US govt. As regards the announcement made yesterday, the industry waits for more clarity in terms of the coverage of tariffs with respect to product line and countries and the situation with respect to the already existing tariffs," he said.