US Tariff Cuts Offer Limited Relief for Indian Exporters

Tariff modifications in the United States bring a touch of relief for Indian exporters, particularly with reduced duties on select metal-involved equipment. Despite this, the persistent high tariffs on imports like steel, aluminum, and copper suggest limited benefit for India’s metal sector overall. Yet, firms leveraging U.S.

The United States' decision to ease tariffs on a select range of metal-containing products offers only limited benefits for Indian exporters, as the most significant duties on steel, aluminium and copper imports remain firmly in place, according to the Global Trade Research Initiative (GTRI).

The Trump administration on June 1 announced targeted modifications to its Section 232 tariff regime, including a reduction in duties on certain industrial and agricultural equipment containing steel, aluminium or copper from 25 per cent to 15 per cent. The lower tariff will be effective from June 8, 2026, through December 31, 2027.

While the move could provide some relief to exporters of engineering goods, HVAC equipment, electrical equipment and agricultural machinery, GTRI said the broader impact on India is expected to be limited.

"For India, the changes offer limited benefits," GTRI said in its assessment of the revised tariff measures.

The trade policy think tank noted that some Indian manufacturers may be able to benefit from the newly introduced 10 per cent tariff category by using U.S.-origin metals in their production processes. India imported about $2.9 billion worth of steel, aluminium, copper and related products from the United States in FY2026, potentially creating opportunities for firms to source American inputs and qualify for lower tariff treatment.

However, GTRI stressed that the fundamental challenge facing Indian exporters remains unresolved.

"The core issue remains unchanged: Indian exports of steel, aluminium and copper products continue to face the punitive 50 per cent Section 232 tariffs, while many downstream metal products remain subject to a 25 per cent duty," the think tank said.

Under the revised framework, products containing 15 per cent or less steel, aluminium or copper by weight will continue to remain exempt from Section 232 tariffs. The administration has also created a new 10 per cent tariff category for imported products manufactured using at least 85 per cent U.S.-origin steel, aluminium or copper by weight.

Despite these adjustments, GTRI emphasised that the main structure of the tariff regime remains intact.

"Most imported steel, aluminium and copper articles will continue to face a 50 per cent tariff, while many downstream and derivative products made from these metals will remain subject to a 25 per cent duty," it said.

According to GTRI, the tariff revisions may create niche opportunities for certain exporters, but they are unlikely to significantly alter overall trade flows or improve market access for India's metal sector as long as the elevated duties on core metal products remain in force.