Trump's steel tariffs hit India: Export risks surge, JSW Steel, Tata Steel stocks tumble

Indian steel producers will face increased challenges in exporting their products as U.S. President Donald Trump announced plans to impose 25% tariffs on steel and aluminium imports, according to Moody’s Ratings.

“We expect the tariffs will benefit steel producers in US by increasing demand for domestic steel and raising their selling prices. Conversely, the US tariffs on steel will increase competition and exacerbate oversupply at other steel producing markets. Indian steel producers will face increased challenges in exporting their products. Over the past 12 months, high steel imports into India have already dampened prices and earnings of steel producers in India,” says Hui Ting Sim, assistant vice president, Moody's Ratings.

Shares of India’s largest steelmaker JSW Steel fell as much as 3.5% in intraday trade to hit a low of ₹948.10 on the BSE on Monday after Trump said the US would levy additional 25% tariffs on steel and aluminium imports into the US.

The Tata Steel stock was also under pressure. Share of the Tata Group company fell as much as 4% to hit a low of ₹133 on the BSE. Meanwhile, broader benchmark indices, the BSE Sensex and the Nifty 50, fell around 1% each.

Shares of state-run Steel Authority of India Ltd (SAIL) slipped as much as 5% to hit a low of ₹104.95 on the BSE, taking its market capitalisation to around ₹43,300 crore.

The proposed tariffs on steel imports in the U.S. come weeks after India’s Directorate General of Trade Remedies (DGTR) started a probe into imports of non-alloy and alloy steel flat products in December 2024 to protect the domestic industry.

Indian Steel Association, which comprises ArcelorMittal Nippon Steel, JSW Steel, Bhushan Power & Steel, Jindal Steel & Power, and Steel Authority of India had sought imposition of safeguard duty on steel imports. The industry body had alleged that there is a “recent, sudden, sharp, and significant increase in the volume of imports, which has caused significant injury to the domestic industry in India.” It further alleged that imports have taken place in such increased quantities and under such circumstances as to cause or threaten to cause serious injury to the domestic industry. The industry association suggested imposing safeguard measures for a period of four years.

According to a McKinsey report, global steel consumption is expected to grow from around 1,764 million metric tons in 2023 to 1,950-2,000 million metric tons in 2035, driven by India and Southeast Asia. As demand stabilises or decreases in traditional, mature markets, it will grow in emerging markets, moving the centres of demand growth. While China is expected to remain the largest steel-consuming country, new geographies could drive steel demand growth in the next decade.