US Tariffs on India: Opportunities and Challenges for Indian Steel Exporters
- Fortran Steel
- May 27
- 10 min read
The U.S.-India trade relationship has always swung between cooperation and conflict. As two of the world's largest democracies and trading partners, both countries benefit from robust bilateral ties, but disagreements over trade rules, tariffs, and market access continue to surface.
One of the most recent flashpoints is the renewed US tariffs on Indian steel, part of a broader strategy by the U.S. to limit metal imports and push domestic manufacturing. These duties directly affect steel exporters from India, including producers of MS & SS products like bars, wires, coils, and fasteners.
India ranks among the top 10 global steel exporters. The Indian steel industry shipped more than 6 million tonnes in FY2024–25, with the U.S. once being a key buyer. But rising trade barriers between India and USA, including a 25% duty on steel products, have disrupted this flow.
As a steel manufacturing company in India with over 30 years in the market, we’ve seen how policies reshape supply chains. In this blog, we unpack the impact of the latest US tariff hike on India, what it means for the steel export from India, and how exporting companies in India can respond with clarity, strategy, and purpose.
Understanding US Tariffs on Indian Steel
The impact of US tariffs on Indian exports is wide and varied. However, before deep diving into the crux of the issue, it's crucial to understand what tariffs are and why their impact matters in global trade.
What Are Tariffs, and Why Do They Matter?
A tariff is a levy placed on items that are imported. For steel, these duties aim to protect domestic mills from foreign competition. But when they hit long-standing trade partners like India, they come with consequences.
The current US tariffs on Indian steel trace back to Section 232 of U.S. trade law. Initially introduced in 2018, these measures slapped a 25% duty on all steel imports, citing national security concerns. Indian steel shipments were directly affected.
Timeline of Tariff Actions
2018: India included in the U.S. global steel and aluminum tariffs.
2019: India retaliates with duties on U.S. almonds, apples, and walnuts, marking the start of a broader India-US trade deficit dialogue.
2025: A new round of U.S. tariffs goes live, including a 10% general duty on all goods from countries with higher tariffs on American products.
These new rules increase the cost burden on steel exporters India relies on. The broader US-India trade relations are now strained by recurring tariff actions, adding to uncertainty for both sides. However, in a key relief, the U.S. recently exempted Indian steel exports from additional reciprocal tariffs, softening the immediate blow but leaving the original 25% duty intact.
India’s Response and Policy Moves
India didn’t stay silent. The Ministry of Commerce filed a complaint at the WTO, arguing the US tariff on India violates international norms. Meanwhile, the idea of reciprocal tariffs India could impose is back on the table. Indian policymakers are also pushing for the restoration of the GSP (Generalized System of Preferences)—a scheme that previously allowed India export to USA duty-free.
Impact on Indian Steel Exporters
The 2025 tariff revision came as a mixed outcome for India. While Indian steel exports were spared additional duties, the standing 25% U.S. tariff continues to limit competitiveness and disrupt long-term contracts.
Higher Duties, Lower Competitiveness
A 25% tariff can wipe out a deal. U.S. buyers are currently paying a much higher price for Indian steel. This makes steel exporters from India less attractive compared to suppliers from countries with trade deals or tariff waivers.
Because of this, India steel exports to the U.S. are expected to drop by over 80% this fiscal year. This loss of market access is especially hard on companies supplying intermediate steel products like coils, rebars, and fasteners.
MSMEs Hit Hardest
Larger firms can absorb shocks. MSMEs often can’t. For smaller steel exporters India supports, the higher cost of compliance, transport, and warehousing abroad adds pressure. Many don’t have global logistics or foreign partnerships to hedge against trade policy shifts.
The U.S. was a consistent buyer of wire rods, bright bars, and steel nails, key products for small steel manufacturing companies in Mumbai and other hubs. Tariffs mean those orders now go to competing countries with lower duties.
Indian Steel Prices and Margin Pressure
The U.S. tariffs have led to an indirect oversupply in Asia. Steel once bound for U.S. buyers from China, Japan, or Korea is being rerouted into the region, including India. This has pulled down steel prices Indian producers had hoped to maintain.
While buyers enjoy lower India steel prices, it compresses margins for Indian steel exporters, especially those producing standard-grade SS & MS bars and coils. The impact is sharper in export-focused clusters like Punjab, Maharashtra, and Tamil Nadu.
Opportunities Emerging from the Trade Dispute
Every trade disruption forces a reset. While the US tariffs on Indian steel have narrowed one door, others are starting to open, especially for steelmakers ready to think beyond the obvious.
New Demand Beyond China
Global buyers, especially in the U.S. and Europe, are actively reducing dependence on Chinese imports. This has created fresh opportunities for Indian steel exporters, particularly in categories like stainless steel bars, fasteners, and long products.
Fortran Steel has seen an uptick in inquiries from buyers looking to replace Chinese supply with trusted steel manufacturers in India. Our long-standing reputation, consistent quality, and supply capability make us a natural partner in this realignment.
Market Diversification
Reduced volumes to the U.S. push exporters of steel to explore new geographies. Gulf countries, Africa, and Southeast Asia have shown increased appetite for Indian material, especially hot rolled bars, bright bars, and steel wires.
Steel exports India directed to the UAE and Europe are steadily climbing. These regions value quality and timely delivery, both areas where top steel companies in India have a proven edge.
Localization Push in the U.S.
One emerging trend: American companies are rethinking their sourcing strategies. Many are considering setting up local warehousing or processing partnerships with Indian suppliers.
This allows them to manage duties better and shorten delivery cycles. Indian firms that can support such partnerships, especially those in stainless steel fittings, fasteners, structural steel, and nails supply, stand to gain.
The shift isn’t just about pricing. It's about building resilient supply chains. This is where trusted steel exporters from India like us come in.
How Indian Companies Can Respond
With full exemption off the table, Indian exporters must adapt to a new trade environment. The focus now shifts to smart mitigation, market diversification, and building resilience into every aspect of the export strategy.
Build Tariff-Resilient Strategies
For exporters, market access is fragile. The next round of duties could target a different product or region. To stay ahead, Indian companies must diversify both product lines and destination markets.
That means investing in value-added products, offering custom sizing or surface treatment, and maintaining flexible logistics setups that allow fast rerouting.
At Fortran Steel, we’ve expanded our network to serve not just the U.S., but also Europe, the Middle East, and Southeast Asia. It’s not just survival, it’s smart positioning.
Use FTAs to Gain Market Access
India has Free Trade Agreements with ASEAN, UAE, Japan, and others. For steel manufacturing companies in India, these FTAs can be powerful tools to reduce tariffs and enter markets more competitively.
Knowing where the India import tariff rates are lowest and aligning your exports accordingly can protect volumes and margins. It's also a way to move away from high-tariff markets like the U.S. without losing business.
Consider Local Partnerships or Warehousing
For high-frequency buyers in the U.S., warehousing stock domestically can reduce the burden of tariffs on steel products. Exporters with the scale and network to support this model can stand out.
Export companies in India need to evaluate the cost-benefit of setting up bonded warehouses or working with local U.S. distributors. It reduces delivery time and increases responsiveness, important factors when tariffs disrupt shipment timing.
For companies like us, already supplying to 30+ countries, exploring local supply chain models is not new. It's how we keep steel moving, even when trade policy shifts.
Government and Policy-Level Actions
Tariffs aren’t just a business issue. They’re a government-to-government problem. While Indian steel exporters adapt on the ground, policy-level decisions can ease or worsen the playing field.
India’s Push at the WTO
The Indian government has taken the matter of the US tariff on India to the World Trade Organization. The case focuses on how the US tariffs on Indian steel violate WTO norms by unfairly penalizing Indian products.
This is part of a broader WTO tariff dispute India US has been locked in since the GSP withdrawal. India's position is clear: its exports don’t pose a threat to U.S. national security and should not face blanket duties.
Reciprocal Tariffs and Strategic Negotiation
There’s growing talk around reciprocal tariffs India may consider on American imports. The logic is that if the U.S. applies steep duties on steel exports from India, India can apply similar pressure on key US exports to India, including farm goods and industrial equipment.
Some lawmakers are also discussing aligning with the Reciprocal Trade Agreements Act model, demanding parity in access and duties.
In recent meetings, India has also requested a review of the GSP India US status. Restoring GSP would allow duty-free access for several Indian goods, including stainless steel products, helping India export to USA more competitively.
The Role of Trade Policy
The bigger picture lies in India trade policy. For the steel sector, there’s a need for both offensive and defensive tools—protecting the local market from diverted imports while securing access abroad.
Ongoing dialogue between the Ministry of Commerce, DGFT, and top steel producing companies in India is crucial. Timely policy action, like safeguard duties, export incentives, and tighter quality controls on imports, can prevent long-term damage.
With India’s total exports growing, steel remains a strategic product. Ensuring steel manufacturers in India aren’t locked out of major economies is a matter of both trade and national interest.
Conclusion
The US-India trade relations remain complex. For the steel manufacturing company in India, large or small, this round of tariffs is just one in a series of trade disruptions that demand fast, calculated responses.
The recent US tariffs on Indian steel bring clear challenges: loss of market share, pricing pressure, and increased competition in third-country markets. But they also bring clarity on where the next opportunities lie.
Steel export from India is still viable, just not in the same way as before. Companies that rethink product strategy, expand market coverage, and stay alert to India import tariff rates can still grow.
At Fortran Steel, we continue to support global buyers with high-quality steel bars, bright bars, wires, fittings, nails, and more, produced and shipped with consistency, speed, and reliability. As a top steel company trusted for over three decades, we remain focused on staying competitive, compliant, and customer-first.
This is a time for strategic movement, not panic. For Indian steel exporters, the way forward is through agility, partnerships, and policy engagement.
The market will keep changing. We'll keep shipping. Contact us today for the best steel solutions in India.
FAQs
What are the current U.S. tariffs on Indian steel exports?
As of 2025, Indian steel exports face a 25% tariff on steel products under Section 232 of U.S. trade law. While India was recently exempted from additional reciprocal tariffs, the base duty remains in place for all steel exports from India to the U.S.
Why did the U.S. impose tariffs on steel from India?
The US tariffs on Indian steel stem from concerns over national security and trade imbalances. The U.S. applied a uniform 25% duty on global steel imports in 2018. In 2025, additional duties were proposed on countries with higher barriers against U.S. goods, triggering more debate around India US tariffs.
How do U.S. tariffs impact Indian steel manufacturers?
Higher tariffs reduce the competitiveness of Indian steel exporters in the U.S. market. This has led to order cancellations, rerouting of inventory, and downward pressure on India steel prices, especially for intermediate products like bars, rods, and wires.
What steps can Indian exporters take to reduce tariff impact?
Steel exporters from India can explore alternate markets such as the UAE, Europe, and Southeast Asia. Some exporting companies in India are also investing in local warehousing or distribution partnerships in the U.S. to stay closer to buyers and mitigate cost pressure from tariffs.
Which Indian steel products are most affected by U.S. tariffs?
Hot rolled bars, steel wires, coils, and nails are among the most affected items. These were previously exported in significant volumes to U.S. construction and manufacturing industries.
Are there any exemptions for Indian steel under U.S. trade policy?
Yes. In April 2025, the U.S. announced that Indian steel and aluminum exports would be exempt from additional reciprocal tariffs. However, the original 25% Section 232 tariff still applies. No full exemption exists yet for steel exports India relies on for trade with the U.S.
What is the difference between a tariff and a tax?
A tariff is a duty applied on imports from foreign countries. A tax is a general financial charge imposed by governments on income, products, or services. Tariffs specifically influence international trade, while taxes apply within national economies.
What is a reciprocal tariff and how does it apply to India?
A reciprocal tariff is when one country matches or mirrors the import duty imposed by another. India has debated reciprocal tariffs in response to U.S. tariff hikes, aiming to protect its trade interests under frameworks like the Reciprocal Trade Agreements Act.
Has India imposed any reciprocal tariffs on U.S. goods?
Yes. In 2019, India levied retaliatory tariffs on 28 U.S. products, including almonds and apples, following the initial steel and aluminum duties. The current stance on reciprocal tariffs India may impose is under review.
How can Indian steel exporters access the U.S. market post-tariffs?
Companies can use bonded warehousing, local partnerships, or shift focus to value-added steel products. Many steel manufacturers in India are now offering custom grades and processing services to remain attractive to U.S. buyers despite duties.
Are U.S.-India tariffs likely to change in 2025?
Talks are ongoing. While some relief was granted in April 2025, the core US tariff on India remains. Trade analysts expect further reviews, especially if India agrees to lower duties on US exports to India.
What is the impact of tariffs on India’s overall export performance?
India’s steel export impact is clear—exports to the U.S. are down, while diverted supply is increasing domestic competition. This has weighed on steel prices Indian producers command and altered India’s balance of trade outlook.
What are the alternatives for Indian steel exporters if U.S. tariffs persist?
Steel export from India can pivot to the Gulf, Europe, and ASEAN regions. Companies are also looking into Free Trade Agreements to access new buyers. Staying flexible on product specs and order sizes helps secure volume outside tariff-heavy markets.
What is the role of the Generalized System of Preferences (GSP) in India-U.S. trade?
The GSP India US program previously allowed duty-free access for many Indian goods, including certain stainless steel items. Its withdrawal in 2019 hurt India export to USA volumes. Reinstating GSP could ease the burden on the steel exporters India depends on.
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