KOLKATA, India – For the past few years, the US has become the main market for Aditya Garodia to export more than 100 steel derivatives, such as fasteners, from factories in West Bengal, eastern India.
However, since US President Donald Trump took office, it has unleashed a series of tariffs (initially 25% of steel and aluminum, as well as independent countries’ tariffs, limited global markets, creating great uncertainty for businesses across the sector.
Garodia, director of Corona Steel Industry Pvt Ltd, told Al Jazeera that, as a result of the tariffs, clients slowed their orders and delayed their payments in an average of one month, but business slowed as customers adopted a waiting and viewing policy.
When Trump announced that it had doubled its steel and aluminum tariffs to 50% since June 4th, it was “like a nail in a co,” as nearly 30% of orders were cancelled. “It’s difficult for the market to absorb such high tariffs.”
The domestic market demand was also low due to competition from cheaper Chinese products, he said, saying their future will depend on India to negotiate tariffs with lower exports to the US than its competitors.
Last year, India exported $4.566 billion worth of iron, iron and aluminum products to the US.
Tariffs: “Playing well in politics”
During his first term in office, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum, citing national security concerns under section 232 of the Trade Expansion Act of 1962. However, certain companies were able to escape because there were no customs duties on the finished product.
However, on February 10, 2025, he announced a 25% tariff on steel and aluminum, including derivatives or finished products, removing all exemptions.
Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), a trade research group, told Al Jazeera that higher tariffs imposed in 2018 had previously failed to revive the US steel industry.
“The tariffs were first implemented in 2018, [US] It rose from $98.6 billion to $114 billion in 2024, and “it’s not cutting imports or boosting production, but it’s playing well in politics, so it’s barely packed,” he said.
As a result, US prices are much higher than in Europe or China, and “it’s expensive to produce cars, buildings and machinery. India needs a clear strategy to protect trade interests, promote fair trade and strengthen domestic manufacturing,” Srivastava said.
Foundries was also affected
In the so-called mutual tariffs announced by President Trump on April 2, he set a rate of 26% for goods from India. He put it on hold for 90 days on April 9, tentatively introducing a 10% base tariff on all countries, giving breathing chambers to attack individual trade deals with the United States.
10% is hard enough for business, but they say that metal melts and turns into shape, and 26% is too expensive for 26% to absorb.
India has around 5,000 foundries, of which 400 are compatible with both domestic and international markets, and an additional 100 are for export only. Some micro, small and medium-sized businesses (MSMEs), and in turn supply pork, scrap and other items to exporters.
Indian foundries are exported products worth around $4 billion worldwide, of which the US market is $1.2 billion, said Rabbi Segar, chairman of the National Center for Export Promotion (NCEP). In the US, it competes with local foundries as well as suppliers from China and Turkish.
The latest tariff sets are a significant blow to Indian foundries. Over 65% of these, and their raw materials suppliers, are MSMEs “facing the brunt of tariffs due to low order,” Saegal said. Customs duty is over 10-14% [make it] It’s difficult for us to survive,” he added.
Yashi Castings partner Pradeep Kumar Madhogaria manufactures molding boxes and pallet cars for Foundries and said that casting projects, particularly in line with export-driven demand, have been postponed or shelved due to uncertainty in the US market.
Small units hit badly
Summit Agarwal, 44, the Kolkata-based manufacturer of clamps, brackets and other items used in industrial products, told Al Jazeera that his business was hit hard by tariffs and he was considering firing some of his 15 employees.
“We are a small unit. The orders have actually dried up after the introduction of tariffs, making it difficult to continue our existing staff. We are thinking of cutting at least 30-40% of my talent. Business from the domestic market is average and the decline in the export market has increased our suffering.”
Shyam Kumar Poddar, 70, who runs a small unit of sheet metal manufacturing in Kolkata, recently purchased a hydraulic press with the aim of expanding his business by investing around Rs 800,000 ($9,400). However, the decline in orders had a severe effect on him.
“I bought a machine just four months ago to expand my business, but I have not had any orders for the past two months.”
“We rely on business exporters because there is already intense competition in the domestic market, but the current scenario is damaging small entrepreneurs like us.”
Pankaj Chadha, chairman of the Indian Engineering Export Promotion Council (EEPC), an industry association, told Al Jazeera that diversification into countries like Peru and Chile is the only way to survive as “we cannot do business with such high tariffs.”
The final number is not yet clear when India and the US have not yet completed their transactions, despite the 90-day suspension on tariffs being set to expire soon. On Friday, India’s Minister of Trade and Industry, Piyush Goyal told reporters that India was ready to enter into a trade deal, but “national interests are always at the best” and that it will not be pushed by deadlines.
For now, Garodia hopes that a solution will be found quickly. “Industry cannot survive in isolation,” he says, citing issues such as a shortage of talent and an increase in production and raw material costs. “India offers cheaper labor and lower cost of production alternatives,” he said.
