The Engineering Export Promotion Council of India (EEPC) has issued a stern warning regarding the potential impact of a proposed 50% tariff hike by the United States on steel and aluminium imports, set to take effect from June 4, 2025. According to the EEPC, this move could severely disrupt India’s engineering exports to the US, particularly given that steel, aluminium, and their derivatives account for nearly a quarter of India’s total engineering shipments to the American market. Currently, India exports approximately USD 5 billion worth of these products to the US annually.

The existing 25% tariff on steel imports, imposed by the US on March 18, 2025, has already created significant challenges for Indian exporters. This earlier measure intensified global competition and disrupted established trade flows, making it more difficult for Indian firms to compete in the US market. While India’s direct steel exports to the US remain relatively modest compared to other major exporters, the tariffs have compounded price pressures and led to a shift in global trade patterns.

EEPC India’s Chairman, Pankaj Chadha, has emphasized that the proposed doubling of tariffs to 50% would make Indian steel and aluminium exports significantly more expensive for US buyers. This is expected to result in a likely decline in shipments, jeopardizing the USD 5 billion export sector.

The EEPC has urged the Indian government to seek a waiver similar to that secured by the United Kingdom, which recently negotiated a trade deal with the US to be exempted from the 25% tariff. The UK’s exemption, achieved through bilateral negotiations, has set a precedent that India could potentially follow during its ongoing Bilateral Trade Agreement (BTA) talks with the US.

Industry experts have noted that the timing of the proposed tariff hike is particularly sensitive, as it coincides with ongoing BTA negotiations between India and the US. The EEPC argues that unilateral tariffs at this stage could complicate negotiations and undermine efforts to secure a favourable trade agreement for India. The council has called for proactive engagement with US counterparts to secure a waiver, highlighting the importance of protecting India’s engineering export sector from further disruption.

The proposed 50% tariff on steel and aluminium imports by the US poses a significant threat to India’s engineering exports, with potential repercussions for trade volumes, competitiveness, and ongoing negotiations. The EEPC’s call for a UK-style exemption underscores the urgent need for diplomatic and trade policy measures to safeguard India’s export interests in this critical sector.

Based On A PTI Report