US unlikely to budge as India lobbies for sectoral tariff exemptions on steel & aluminium
NEW DELHI : The United States (US) hasn’t yet budged to repeated requests to exempt India from steeper sectoral tariffs, especially on steel and aluminium in return for concessions New Delhi plans to provide through the proposed trade deal between them, a source privy to the development said.
“So far, they (US) have not agreed on sectoral tariffs coming down. Steel and aluminium, exports are getting impacted due to higher duties though automobile sector is not seeing an impact since India does not sell much auto to the US,” the source added.
Requests to exempt India from the 25-percent tariff on US imports, specifically on steel and aluminium was likely raised when India’s Department of Commerce and the US Trade Representative’s Office held extensive discussions between April 23 and April 25 in Washington.
India’s push to secure relief from steeper duties come at a time when additional duties imposed by the US on iron and steel and auto parts are set to hit the engineering exports sector. “There could be a potential annual drop of $4-5 billion in engineering shipments to the US as a consequence of it. Besides, we are going to face massive competition from China in other markets as they vehemently push their products there as they chase new regions to de-risk the US,” according to Pankaj Chadha, Chairman, EEPC India.
The US is also the number one destination for Indian engineering exports. Engineering goods exports to the US grew 8.7 percent to $19.15 billion in FY25 from $17.62 billion in FY24.
US President Donald Trump’s administration has levied a 25-percent sectoral tariff on steel, aluminium, automobiles and auto parts coming into America from all nations.
To be sure, on April 29, Trump softened tariffs on automobile parts by rolling certain measures, including reducing the amount companies with US factories will pay in import taxes on foreign parts.
While Trump, on April 9 paused the country-specific tariffs on all nations, barring China, including an additional 16 percent reciprocal levy on India, the baseline tariff of 10 percent and certain sectoral duties have started to spell trouble for Indian exporters.
Therefore, India is looking to garner relief from these sectoral duties while leveraging the mutual concessions on tariffs expected through the trade deal with US.
Commerce minister Piyush Goyal on April 25 said that India is seeking greater access for its steel through free trade agreements (FTA) with countries and blocs.
India and the US are looking to conclude negotiations for the first tranche of the proposed bilateral trade agreement (BTA) by autumn of 2025, after both nations signed the terms of reference for the pact, the commerce ministry said on April 15.
The BTA is part of a new goal – Mission 500 – aiming to more than double bilateral trade between the two countries to $500 billion by 2030.