The United States' decision to double tariffs on steel and aluminium imports is poised to create significant challenges for Indian metal exporters. Effective June 4, 2025, the increased tariffs, which raise the rate from 25% to 50%, are expected to impact approximately $4.56 billion worth of Indian exports to the US. This move, announced by President Donald Trump on May 30, 2025, invokes Section 232 of the US Trade Expansion Act of 1962, a law that permits the president to impose trade restrictions based on national security concerns.

In the fiscal year 2024-25, India's metal exports to the US included $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminum and related articles. According to the Global Trade Research Initiative (GTRI), these exports now face considerably higher tariffs, which could threaten the profitability of Indian producers and exporters. The increased duties are expected to raise product costs for Indian manufacturers and exporters in the American market, potentially affecting their competitiveness.

The implications of this tariff hike extend beyond immediate financial concerns. GTRI also suggests that the increased tariffs could drive US steel prices above $1,180 per tonne, leading to increased costs for key sectors such as automotive, construction, and manufacturing.

India has already signaled its intention to respond to these tariffs. The country has issued a formal notice to the World Trade Organization (WTO), indicating its plan to impose retaliatory tariffs on US goods. While India had previously refrained from immediate retaliatory measures, prioritizing negotiations for a bilateral trade deal, the doubling of tariffs may prompt a more assertive response. It remains to be seen whether India will proceed with increasing tariffs on certain US exports within a month.

This is not the first time the US has imposed tariffs on steel and aluminum. In 2018, the Trump administration initially set tariffs at 25% for steel and 10% for aluminum. In February 2025, tariffs on aluminum were already raised to 25%. These actions, including the latest tariff increase, reflect a broader strategy by the US to protect its domestic industries.

The Indian government is also exploring additional response measures to safeguard its economic interests. These measures could include seeking alternative markets for its steel and aluminum products and providing support to domestic industries affected by the tariffs.