The 25 per cent tariffs imposed by the US on its steel and aluminium imports are unlikely to significantly impact the Indian steel industry, said a senior steel ministry official.
These tariffs come into effect from Wednesday.
“India exports less than 100,000 tonnes of steel to the US, so the Indian steel industry won’t be affected much,” said the official.
The official said given geoeconomic turmoil, the government is taking measures to ensure the domestic steel industry remains profitable. “We are ensuring that the domestic industry remains profit-making and they get an adequate price in terms of the product they are selling,” the official added.
The Directorate General of Trade Remedies (DGTR) is already looking into the dumping of steel in the country. Industry has been pushing for imposition of safeguard duty on certain imports.
Exporters expect a hit in outbound shipments because of higher prices. The $5 billion of annual engineering goods exports and $1 billion of shipments in transit in the high seas will be subject to higher tariffs.
“The American customer will get hit and demand will come down. Around $5 billion annual exports will be subject to higher tariffs. It is too early to predict the trade diversion and flows and it would depend on which country gets to do a side deal with the US first,” said EEPC India chairman Pankaj Chadha. Overseas clients have begun asking Indian exporters about what happens to the shipments in transit. “We expect with substantial price increase in US, the consumption will take a hit and thereby the demand, which will affect our exports of steel and aluminium products,” said Federation of Indian Export Organisations director general Ajay Sahai.
India has a trade deficit in iron and steel, exporting $494.2 million to the US while importing $842 million. In aluminium and aluminium products, trade is nearly balanced, with exports at $859.8 million and imports slightly higher at $898.9 million.