Steep US metal tariffs go away Indian foundries gasping – DW – 08/20/2025 | EUROtoday

Work has slowed or stopped in Kolkata, a significant hub for India’s metal foundries that export sanitary castings. Owners talk about misery privately however do not share a lot publicly, and employees are confused.

But some homeowners, like Vijay Shankar Beriwal of Calcutta Iron Udyog, should not holding again. He blames the 50% tariff on metal and aluminum imposed by US President Donald Trump, which went into impact in June. Trump cited nationwide safety considerations beneath Section 232 of the US Trade Expansion Act of 1962 for the transfer. In addition to the metal tariffs, Trump has additionally imposed 25% “reciprocal tariffs” on most Indian items. The US president has proposed an extra 25% tariff, set to enter impact later this month, in response to India’s purchases of Russian oil.

“The full impact has yet to hit the market, but the stressors have begun to show. Those with existing US orders are clearing them fast, but new orders are slow or absent. Many foundries have stopped work,” he says.

The 50% metal and aluminum tariff, a part of Trump’s protectionist commerce insurance policies, threatens to choke japanese India’s export-driven foundries and medium and small enterprises (MSMEs), which rely closely on the US market.

India exported $4.56 billion in iron, metal, and aluminium merchandise to the US final yr, together with $587.5 million in iron and metal, $3.1 billion price of iron or metal merchandise, and $860 million in aluminium merchandise, primarily based on knowledge from the Ministry of Commerce and Industry. This accounts for roughly 5.3% of India’s $86.51 billion whole exports to the US.

Massive blow to smaller foundries

Although a smaller portion, they signify a big share of India’s foundry sector, which employs over 200,000 employees in labor-intensive manufacturing throughout greater than 5,000 items, of which over 95% are categorized as small-scale.

Moreover, not like within the state of Maharashtra or Tamil Nadu, the place foundries cater to home automotive and development markets, japanese India’s foundries concentrate on export-oriented castings, making them notably weak to tariff disruptions.

Indian Commerce Minister Piyush Goyal has downplayed the influence of tariffs on metal and aluminium, arguing that metal and aluminium exports to the US are negligible.

“How does it matter if out of 145 million tons, you are not able to export 95,000 tons?” he mentioned at a Bengal Chamber of Commerce and Industry occasion.

Chinese metal dumping

The home market can also be beneath stress. With export orders stalling, producers are flooding the native market, intensifying competitors.

“Some clients demand 5% price cuts, others want credit payment. These are unprecedented moves,” says RK Damani, proprietor of Industrial Casting Corporation in Kolkata.

The Federation of Indian Export Organizations (FIEO) estimates an 85% drop in US-bound metal exports, resulting in a surplus that would push down home metal costs by 6-8%, additional squeezing MSME margins.

“With the tariffs now, competitive pricing will be a deciding factor. But some countries, like China, have a great appetite for undercutting prices. Indian SMEs may not have the wherewithal to match that,” mentioned FIEO Director General Ajay Sahai.

While his remark primarily focuses on sectors like textiles, the metal sector faces related pressures, as China’s capability to redirect low-cost metal to India threatens smaller producers. The Indian Stainless Steel Development Association (ISSDA) notes that India has grow to be a web importer of completed metal since FY 2023-24, with imports rising considerably between 2021 and 2024, primarily from China.

“The problem with steel exports is that all developed countries are closing. Europe [European Union] has been charging duties since 2018, and from January 2026, it will impose the Carbon Border Adjustment Mechanism (CBAM),” mentioned Ajai Srivastava, founding father of the Global Trade Research Initiative.

Government intervention

India’s metal and aluminium exports to the European Union have been beneath stress because of the duties, and the CBAM, a carbon tax on high-emission imports, might make it worse by additional eroding India’s competitiveness.

The foundry sector primarily contains small gamers with slender revenue margins. The 50% tariff makes US orders cost-prohibitive, and redirecting to markets just like the Middle East or Southeast Asia requires time and capital that many of those firms lack.

The Indian authorities is responding to the state of affairs with a multi-pronged technique. The Ministry of Commerce is pursuing a bilateral commerce settlement with the US to decrease the tariffs. Measures like curiosity subsidies, mortgage ensures, and diminished certification charges are being thought of to assist MSMEs. The Directorate General of Trade Remedies has additionally proposed a 12% safeguard obligation on sure metal merchandise to guard the home market from Chinese dumping.

Beriwal of Calcutta Iron Udyog stays hopeful about authorities intervention to guard the foundries.

“The industry urgently needs some support from the government to stay afloat. We will be approaching the government with a proposal, but as of now, we are holding on for how things roll with the US President,” he mentioned.

However, business insiders warn that MSMEs might face layoffs and closures by early 2026 with out swift motion.

Edited by: Ashutosh Pandey