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The Donald Trump administration’s decision to raise tariffs on aluminium imports from 10 to 25 per cent starting March 12 is set to hit Indian exporters, for whom the United States has become the largest international market for aluminium products.
In 2023-24, India’s aluminium exports to the US stood at $946 million (Rs 7,831 crore), after exceeding $1 billion in each of the previous two financial years, according to official trade data. Exports have surged in recent years, up from just $350 million in 2016-17, when Trump began his first term as US President.
While India accounts for only 3 per cent of US aluminium imports, it is the largest supplier of aluminium conductors — stranded wires and cables used in electrical applications. India is also the world’s second-largest aluminium producer after China, though much of its output is consumed domestically.
As the new 25 per cent tariffs are significantly broader than those imposed in 2018, covering a wider range of semi-finished and finished aluminium products, it may disrupt the recent growth momentum of firms with strong export focus on the US. However, while some may see a hit in revenues, the overall impact is expected to be limited, as aluminium exports form a small share of business for most companies. The US, despite being India’s top market, accounts for around 12 per cent of total aluminium exports.
In 2024, the US imported nearly 38 per cent of aluminium conductors by weight from India, valued at $130 million. In 2023, imports peaked at $261 million, rising from just $40 million in 2021, data from the United States International Trade Commission (USITC) showed.
Aluminium conductors, used in high- and medium-voltage cables, efficiently transmit power to the grid due to their lightweight and durable properties. Indian exporters have been keen on the US market, driven by rising demand in states like California, Texas, Nevada and Arizona, where infrastructure spending and grid modernisation efforts have accelerated.
In addition to aluminium conductors, the US also imports other products from India, including unwrought aluminium ($185 million in 2024), nails and fasteners ($107 million), and wire ($98 million), USITC data showed. India also accounted for 26 per cent of all aluminium tube and pipe fittings imported into the US in 2024, valued at $16 million.
In 2018, Trump had imposed 25 per cent tariffs on steel and 10 per cent tariffs on aluminium imports. “But exemptions and loopholes have permitted evasion of the tariffs and weakened the effectiveness of the programme,” the White House said in a release on February 11, soon after Trump’s second term started.
“The countries of Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom had received exemptions, which prevented the tariffs from being effective,” it said.
India did not receive any exemptions, and export of aluminium conductors saw an increase despite tariffs.
The impact of the latest tariffs is likely to be higher on the aluminium industry as compared to the steel industry.
The new 25% tariffs imposed by the US cover a wider range of semi-finished and finished aluminium products, along with derivative goods — from machinery components to knitting needles — posing challenges for India’s fragmented downstream aluminium industry.
“India exports primary aluminium (around 40% of our domestic aluminium production is exported). India’s direct aluminium exports to the US are around 6-8%. Consequently, the surge in tariff in the US is likely to have a relatively higher impact on export volumes and its realisations for Indian aluminium manufacturers than steel manufacturers,” CareEdge Ratings noted in a recent analysis.
The spillover effect on India’s steel industry could be more pronounced if China, also hit by the latest tariffs, diverts excess steel into the Indian market.
“India’s direct steel exports to the US are relatively low, constituting around 4% of its total exports in CY24. As a result, the direct impact on the steel sector’s sales volume due to the imposition of tariffs by the US is not expected to be significant. However, there is likely to be an indirect effect on realisations if major steel exporters to the US divert some of their supplies to India,” CareEdge said.
While the US ranked only sixth among destinations for India’s iron and steel exports — valued at $476 million (Rs 3,935 crore) in 2023-24 — it was the largest market for iron and steel articles, with exports touching $2.8 billion (Rs 23,128 crore) in the same period. As with aluminium, the Trump administration’s latest tariffs extend beyond raw steel to include steel products as well.
