India faces indirect fallout as US doubles tariffs on steel and aluminium imports

The United States has announced a steep hike in tariffs on imported steel and aluminium, doubling them to 50% starting June 4. While aimed at reviving American manufacturing, the move has triggered fresh concerns about global trade disruptions. For India, however, the immediate commercial impact may be limited—at least on paper.

Indian metal exports to the US form only a minor share of Washington’s total steel and aluminium imports. Canada and Brazil remain the dominant suppliers, with India’s contribution being relatively insignificant. Yet, experts warn that the consequences could extend far beyond direct trade exposure, with global supply chains getting rearranged and trade sentiment turning cautious.

Indian metal companies like Hindalco may find a silver lining in the form of rising US aluminium premiums, but risks remain. Hindalco’s US subsidiary, Novelis, could face serious earnings pressure if it doesn't receive exemptions. The company already expected a $40 million quarterly EBITDA hit under the old tariff; with the rate doubling, those losses may deepen.

More broadly, the tariff hike could cause global exporters—especially from the EU, Brazil and China—to redirect excess steel and aluminium to India, where cheap imports are already a concern. India may thus face a squeeze on domestic prices, margin pressures on producers, and rising friction in trade relationships even as it formally contests the tariffs at the WTO.