Work has slowed or stopped in Kolkata, a major hub for India's steel foundries that export sanitary castings. Owners discuss distress privately but don't share much publicly, and workers are confused. 

But some owners, like Vijay Shankar Beriwal of Calcutta Iron Udyog, are not holding back. He blames the 50% tariff on steel and aluminum imposed by US President Donald Trump, which went into effect in June. Trump cited national security concerns under Section 232 of the US Trade Expansion Act of 1962 for the move. In addition to the steel tariffs, Trump has also imposed 25% "reciprocal tariffs" on most Indian goods. The US president has proposed an additional 25% tariff, set to go into effect 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% steel and aluminum tariff, part of Trump's protectionist trade policies, threatens to choke eastern India's export-driven foundries and medium and small enterprises (MSMEs), which rely heavily on the US market.

India exported $4.56 billion in iron, steel, and aluminium products to the US last year, including $587.5 million in iron and steel, $3.1 billion worth of iron or steel products, and $860 million in aluminium products, based on data from the Ministry of Commerce and Industry. This accounts for roughly 5.3% of India's $86.51 billion total exports to the US.

Massive blow to smaller foundries

Although a smaller portion, they represent a significant share of India's foundry sector, which employs over 200,000 workers in labor-intensive production across more than 5,000 units, of which over 95% are categorized as small-scale. 

Moreover, unlike in the state of Maharashtra or Tamil Nadu, where foundries cater to domestic automotive and construction markets, eastern India's foundries specialise in export-oriented castings, making them particularly vulnerable to tariff disruptions.

Indian Commerce Minister Piyush Goyal has downplayed the impact of tariffs on steel and aluminium, arguing that steel 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 said at a Bengal Chamber of Commerce and Industry event.

Chinese steel dumping

The domestic market is also under pressure. With export orders stalling, manufacturers are flooding the local market, intensifying competition.

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

The Federation of Indian Export Organizations (FIEO) estimates an 85% drop in US-bound steel exports, leading to a surplus that could push down domestic steel prices by 6-8%, further 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," said FIEO Director General Ajay Sahai.  

While his comment mainly focuses on sectors like textiles, the steel sector faces similar pressures, as China's ability to redirect low-cost steel to India threatens smaller producers. The Indian Stainless Steel Development Association (ISSDA) notes that India has become a net importer of finished steel since FY 2023-24, with imports rising significantly between 2021 and 2024, mainly 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)," said Ajai Srivastava, founder of the Global Trade Research Initiative.

Government intervention

India's steel and aluminium exports to the European Union have been under pressure due to the duties, and the CBAM, a carbon tax on high-emission imports, could make it worse by further eroding India's competitiveness. 

The foundry sector mainly comprises small players with narrow profit margins. The 50% tariff makes US orders cost-prohibitive, and redirecting to markets like the Middle East or Southeast Asia requires time and capital that many of these companies lack.

The Indian government is responding to the situation with a multi-pronged strategy. The Ministry of Commerce is pursuing a bilateral trade agreement with the US to lower the tariffs. Measures like interest subsidies, loan guarantees, and reduced certification fees are being considered to support MSMEs. The Directorate General of Trade Remedies has also proposed a 12% safeguard duty on certain steel products to protect the domestic market from Chinese dumping. 

Beriwal of Calcutta Iron Udyog remains hopeful about government intervention to protect 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 said. 

However, industry insiders warn that MSMEs could face layoffs and closures by early 2026 without swift action.

Edited by: Ashutosh Pandey