US Cuts Tariffs On Select Industrial & Farm Equipment; Limited Benefits For Indian Exporters, Says GTRI

New Delhi, Jun 3 (KNN) The United States has announced a partial reduction in tariffs on certain industrial and agricultural equipment containing steel, aluminium, or copper — bringing the rate down from 25 per cent to 15 per cent. 

The revised rates will be effective from June 8, 2026, to December 31, 2027, PTI reported, citing the Global Trade Research Initiative (GTRI).

What Is Covered

Products covered under the reduced tariff include heating and air-conditioning (HVAC) equipment, bulldozers, forklifts, harvesters, agricultural machinery, and select electrical grid equipment.

A new preferential rate of 10 per cent has also been introduced for imported goods manufactured using at least 85 per cent US-origin steel, aluminium, or copper by weight. Products containing 15 per cent or less of these metals by weight will continue to remain exempt from Section 232 tariffs altogether.

Core Metal Tariffs Unchanged

Despite the relief on finished equipment, the underlying metal tariffs remain untouched. Most imported steel, aluminium, and copper articles will continue to attract a 50 per cent tariff, while many downstream and derivative metal products remain subject to a 25 per cent duty.

India Sees Limited Upside

For India, the practical benefit is expected to be modest. GTRI Founder Ajay Srivastava noted that Indian exporters of engineering goods, HVAC equipment, electrical equipment, and agricultural machinery could benefit from the reduced 15 per cent rate. Some manufacturers may also qualify for the 10 per cent rate by sourcing US-origin metals as inputs.

India imported approximately USD 2.9 billion worth of steel, aluminium, copper, and related products from the US in FY2026, offering a potential avenue for Indian manufacturers to use American inputs and export finished goods to the US at the lower tariff.

However, Srivastava cautioned that the fundamental challenge persists. He noted that Indian exports of steel, aluminium, and copper products continue to face the steep 50 per cent Section 232 tariffs, keeping the overall trade outlook for India's metals sector largely unchanged.

(KNN Bureau)