No Breakthrough in Sectoral Duty Relief Despite Intense Bilateral Trade Talks
India’s persistent efforts to gain relief from steep sectoral tariffs on steel and aluminium have met with continued resistance from the United States, with no agreement reached during high-level trade discussions held in Washington between April 23 and 25. According to sources familiar with the matter, the United States Trade Representative’s Office has yet to agree to New Delhi’s repeated requests for exemptions from the 25-percent tariffs levied on steel and aluminium imports. These tariffs were imposed during the Trump administration and remain largely in place, affecting India’s key engineering export sectors.
Highlights:
US maintains 25% tariffs on steel and aluminium: Despite India’s lobbying efforts during April trade talks.
No US commitment to sectoral relief: Even with India offering broader trade concessions.
Steel and aluminium exports impacted: Other sectors, like autos, unaffected due to limited Indian presence in the US.
Engineering Exports at Risk Amid High US Tariffs
$4–5 Billion Annual Export Impact Feared; Indian Firms Brace for Fallout
India’s engineering sector could face a potential annual decline of $4–5 billion in exports to the US if no relief is granted from the elevated tariffs. The engineering goods industry, heavily reliant on markets like the United States, is already bracing for disruptions due to additional duties on iron, steel, and auto parts. According to EEPC India Chairman Pankaj Chadha, Indian exporters also face growing pressure in third-country markets as China aggressively redirects its exports amid a broader decoupling from the US.
Highlights:
Engineering exports under threat: Possible $4–5 billion hit projected annually.
China intensifies global competition: Aggressively targets new regions post-US trade friction.
Engineering sector most vulnerable: Particularly in steel, iron, and related exports.
US Retains Tariff Framework Under Trump-Era Trade Policies
Adjustments to Auto Duties Exclude India; 10% Baseline and Sectoral Levies Remain
While the Trump administration made some concessions in late April by easing auto part tariffs for companies with US manufacturing operations, these adjustments did not extend to India. Furthermore, although country-specific tariffs were paused on April 9 for all nations except China, India remains subject to a baseline import tariff of 10 percent and additional sectoral duties. These measures have already begun to weigh on Indian exporters across several product categories.
Highlights:
Auto parts duty softened selectively: Relief applies to companies with US-based factories.
India excluded from targeted relaxations: Still faces full 10% baseline tariff and sectoral levies.
April 9 policy shift limited in scope: Focused primarily on addressing concerns outside India.
India Seeks Leverage Through Bilateral Trade Agreement
Bilateral Trade Agreement Talks Target Autumn 2025 Conclusion
India is attempting to secure sectoral tariff relief by leveraging broader trade negotiations with the US through the proposed Bilateral Trade Agreement (BTA). According to the Ministry of Commerce, the first phase of the BTA is expected to be concluded by autumn 2025. The two countries signed the terms of reference for the agreement on April 15. The pact is a central component of Mission 500, an ambitious strategy aimed at boosting bilateral trade volumes to $500 billion by 2030.
Highlights:
BTA negotiations underway: First phase expected to wrap up by autumn 2025.
Mission 500 launched: Seeks to more than double India-US trade to $500 billion by 2030.
India ties tariff relief to trade deal: Hoping for sectoral concessions via mutual give-and-take.
Commerce Ministry Pushes FTAs for Steel Market Access
India Eyes Alternative Avenues to Expand Export Base
Alongside bilateral talks with the US, India is also pursuing greater access for its steel exports through other Free Trade Agreements (FTAs) with key trading partners and regional blocs. Commerce Minister Piyush Goyal confirmed on April 25 that the government is exploring FTA options to bypass tariff bottlenecks and ensure more competitive global positioning for Indian steel. These efforts are being aligned with India’s larger export-oriented industrial strategy in FY25 and beyond.
Highlights:
India turns to FTAs: Aims to diversify steel export markets.
Commerce ministry explores alternatives: FTAs seen as key to overcoming tariff hurdles.
Export strategy recalibrated: Focused on securing stable global market access.
