How Trump’s Tariffs Could Impact India’s Steel Industry: Key Insights and Implications

BENGALURU – In a bustling suburb of Bengaluru, small factories buzz with activity. Workers diligently turn Indian-made steel into various items, ranging from car parts to kitchen sinks. Recently, an announcement by U.S. President Trump about imposing high tariffs on steel imports has garnered unexpected support from some local workers.

Many in the industry believe that these tariffs will lead to cheaper steel being dumped in India. The 25% tariff is expected to push exporters from countries like China and South Korea out of the U.S. market, making it more affordable for Indian manufacturers.

B. Praveen, who owns Sun Techpro Engineering, a small steel manufacturing company, sees a silver lining. He mentioned that his profit margins could improve as the cost of raw steel decreases. “For thousands of companies like mine, this could be a good thing,” he said. Such businesses employ over 200 million Indians, playing a vital role in the country’s economy.

However, the situation isn’t universally positive. Naveen Jindal, head of the Indian Steel Association, expressed his concerns. He pointed out that India is one of the few major markets without strong trade restrictions, making it vulnerable to steel dumping. Increased competition could sidetrack India’s efforts to adopt cleaner steel production methods.

Steel production in India is already a major contributor to greenhouse gas emissions. Currently, up to 12% of the country’s emissions stem from steelmaking, and this figure could double if production ramps up as planned. The Indian government anticipates steel production will rise from 120 million tons to 300 million tons in five years, fueled by rapid urbanization and infrastructure growth.

Research from the Global Energy Monitor highlights that Indian steelmakers mainly use coal-based blast furnaces to produce steel. This method is less environmentally friendly compared to practices used by countries like China or the U.S. Recently, the Indian government announced a $1.72 billion investment to help transition the steel industry to cleaner technologies.

Despite this, many new steel production plans still rely on coal. Henna Khadeeja, a research analyst, explained that the immediate focus is on boosting production rather than prioritizing cleaner methods. She noted, “The strategy is mainly to retrofit and decarbonize later.” This approach could have consequences for India’s long-term sustainability goals.

As India continues to grow, balancing economic demands with environmental responsibilities is crucial. The European Carbon Border Adjustment Mechanism, a new tax on carbon emissions for imported goods, may make it harder for Indian steel to compete in international markets. Easwaran Narassimhan from the Sustainable Futures Collective warned that Indian steel made with high emissions could struggle to find buyers in Europe.

India has ambitious climate targets. By 2030, the country aims to generate 500 gigawatts of clean energy, having recently achieved 100 gigawatts, mostly from solar power. Additionally, India is committed to reaching net-zero emissions by 2070, meaning it needs to either stop adding greenhouse gases or remove an equivalent amount from the atmosphere.

Indian steelmakers acknowledge the urgency of lowering emissions but are wary of the costs involved. Prabodh Acharya, chief sustainability officer at JSW Group, emphasized the need for financial viability in business, saying, “Steel is essential for growth. We need to strike the right balance between economic growth and decarbonization.”

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Naveen Jindal,Prabodh Acharya,Business,environment,Climate