India’s Steel Industry Under Pressure: Rising Dumping Concerns Amid Trump’s Tariff Plans

India Steel Braces for Jolt from Trump’s Tariff Threat. This spells doom for the Indian steel industry, as it was in flames when former US President Donald Trump vowed to impose a 25% tariff on steel and a 10% tariff on aluminum imports. The action is perceived as a repeat of his first term’s trade policy, which is likely to make prices hard to bear and also lead to the dumping of steel within the Indian market.

Growing Concerns Over Steel Dumping:

The Indian steel sector is already grappling with rising imports due to trade diversions and global protectionist measures. Data shows that imports from China alone surged by 80% to 1.61 million tonnes between January and July 2024. This prompted India’s Ministry of Steel to urge the Ministry of Commerce to impose a similar 25% duty on incoming steel to safeguard domestic producers.

Loss of access to a large consumer market like the U.S. would mean exports diverting towards other countries like India, therefore, putting an upside pressure on domestic prices in India,” according to Ajay Sahai, Director General & CEO of the Federation of Indian Export Organisations, or FIEO. Experts warn that exporters of steel might seek alternative markets if Trump’s tariff plans happen.

Can India Secure an Exception?

Despite these concerns, industry insiders believe India could be granted an exemption. A similar scenario unfolded in 2019 when India retaliated against Trump’s tariffs by imposing levies on 28 U.S. products. The two nations later reached a trade resolution during Prime Minister Narendra Modi’s Washington visit.

With Modi scheduled to visit the U.S. on February 12-13, all eyes are on whether fresh negotiations could prevent a repeat of history.

Impact on Indian Steel Producers:

Global credit rating agency Moody’s has already sounded the alarm, warning that Trump’s tariffs could exacerbate oversupply issues in other steel-producing markets. “The U.S. tariffs will heighten competition, making it harder for Indian steel producers to maintain exports,” said Hui Ting Sim, Assistant Vice President at Moody’s Ratings.

Industry leaders also recall the ripple effects of Trump’s previous tariff measures. “In his last tenure, Chinese exports diverted from the U.S. to Europe, which then imposed its restrictions, adversely impacting Indian steel exports,” noted Anubhav Kathuria, Managing Director of Synergy Steels.

With global trade dynamics shifting, India’s steel industry faces an uncertain road ahead, needing strategic policy measures to protect itself from the potential fallout of a renewed trade war.