By Neha Arora
NEW DELHI (Reuters) – India’s aluminium shipments to the U.S., its top export market for the metal, will likely drop due to tariffs proposed by Washington, prompting producers to look at other markets such as Europe, industry executives and a government source said on Monday.
U.S. President Donald Trump said on Sunday he would introduce new 25% tariffs on all steel and aluminium imports into the United States in another major escalation of his trade policy overhaul. He also said he would announce reciprocal tariffs on Tuesday or Wednesday.
Those measures would drag down India’s aluminium exports to the United States, affecting the profitability of Indian producers, the executives and the source said.
Although Indian aluminium producers, which include Vedanta Aluminium and Hindalco Industries, could look to other markets in Europe and Southeast Asia, these would take time to absorb the additional supplies, they said.
“India is one of the major exporters to the U.S. and the tariffs will have a significant impact,” B.K. Bhatia, additional secretary general at the Federation of Indian Mineral Industries, the country’s leading mining body, told Reuters.
“Some bilateral arrangement has to be made for concessional tariffs to ease the situation,” Bhatia said.
Indian Prime Minister Narendra Modi is scheduled to meet Trump this week, and is likely to propose additional tariff cuts that could boost American exports to India and avoid a potential trade war between the two countries.
India, the world’s second biggest primary aluminium producer, exported 0.2 million metric tons of aluminium to the U.S., worth 78.3 billion rupees ($894.4 million), in the year to March 2024, government data showed.
Unlike aluminium companies, India’s steel producers are not expected to face significant setbacks as their supplies to the U.S. are smaller.
India could see an increase in steel shipments as other countries may divert cargoes to New Delhi due to the proposed U.S. tariffs on the alloy, they said.
The country became a net importer of steel in the 2023-24 fiscal year, and imports have steadily increased in recent months.
(Reporting by Neha Arora; Editing by Mayank Bhardwaj and Jan Harvey)
