Trump’s Steel and Aluminum Tariffs Hurt Indian Foundries Financially
Kolkata, India — For several years, India, particularly the steel manufacturing sector, has engaged robustly with the United States, exporting over 100 steel derivative products, including fasteners, from West Bengal. However, the initiative faces challenges due to the evolving tariff landscape under the previous U.S. administration, which has introduced significant uncertainty for businesses across various sectors.
Aditya Garodia, director of Corona Steel Industry Pvt Ltd, expressed concerns regarding the impact of recently imposed tariffs. Since the introduction of a 25% tariff on steel and aluminum by former President Donald Trump, businesses have reported delays in payment and reduced order volumes as clients adopt a cautious approach. Following Trump’s announcement to double the tariffs to 50%, Garodia noted a dramatic decline in orders, which he characterized as detrimental to market stability.
Domestic demand has also been adversely affected, particularly due to competitive pricing from Chinese products. In order to continue thriving in the American market, Indian exporters are advocating for negotiations that could secure more favorable tariff terms compared to international rivals. In the previous year, India successfully exported .56 billion worth of iron, steel, and aluminum to the U.S., reflecting the country’s significant role in the global steel supply chain.
The political context surrounding tariffs reveals they are often utilized for their perceived electoral benefits rather than genuine strategies to bolster domestic industries. Ajay Srivastava, founder of the Global Trade Research Initiative, noted that the original intentions behind the tariffs have not achieved their stated goals, as imports have continued to rise, leading to inflated manufacturing costs for automobiles, buildings, and machinery in the U.S. Srivastava emphasizes the urgent need for India to develop a robust strategy to safeguard its trade interests while focusing on strengthening domestic manufacturing capabilities.
Indian foundries, accounting for a valuable segment in the manufacturing landscape, face additional pressures due to the tariffs. Among the approximately 5,000 foundries across the nation, many rely heavily on exports to survive in a competitive global market. Ravi Sehgal, chairman of the National Centre for Export Promotion, highlighted that the recent wave of tariffs poses a considerable challenge to these industries, particularly among smaller enterprises that represent a dynamic segment of India’s manufacturing ecosystem.
Business operations have been severely impacted as tariffs exceed sustainable levels. As some manufacturers contemplate workforce reductions in response to dwindling orders, experts are advocating for diversification in export strategies to bolster resilience against changing market conditions.
With the current pause on tariffs nearing an end, clarity around future policies remains elusive. Piyush Goyal, India’s Minister of Trade and Industry, has affirmed the nation’s commitment to pursuing a favorable trade agreement while prioritizing national interests. For industry leaders like Garodia, the hope is that swift resolutions will allow businesses to thrive, leveraging India’s advantages, including its skilled labor force and competitive production costs to maintain strong international relations.
#BusinessNews #MiddleEastNews
