The trade deal between India and the United States, which was announced on February 2, has improved sentiment across India's industrial value chain. However, according to Kallanish, the impact on steel production remains indirect and focuses on processing.

U.

S. Article 232 tariffs on steel, aluminum, and copper remain at 50%, while duties of 25% still apply to individual automotive components, which limits direct exports of Indian steel to the United States.

Market participants generally consider the agreement to be neutral for steel trade. An expert on the steel sector notes that Indian steel exports to the United States were already minimal last year due to tariffs, and volumes were low even before the recent increase. In this context, any tariff reduction is unlikely to lead to a significant recovery in exports, and "major changes" are not expected unless the terms of section 232 are clearly specified.

Policy clarity also remains limited. The industry veteran warns that for now the details are limited to political statements and publications on social networks, and prefers to wait for official documentation before assessing the consequences of the deal.

Further processing is of direct importance for steel production. The reduction of U.

S. reciprocal duties on Indian goods from 50% to 18% significantly increases the competitiveness of several export-oriented steel industries. Their expansion is expected to lead to an increase in domestic steel consumption rather than direct export flows.

Mechanical engineering and capital goods represent the most powerful transmission mechanism. Machinery and equipment account for 8.1% of Indian exports to the United States and, according to the latest report from research firm SAMCO Securities, are the direct beneficiaries.

Lower tariffs can reduce the cost of Indian-made boilers, industrial equipment and nuclear technology, which actively use hot-rolled coils and specialized sheets. An increase in the volume of orders in these segments, as a rule, leads to an increase in steel consumption.

Automotive components are showing more steady but narrower growth. Export-oriented counterfeit manufacturers benefit from an increased price margin, although duties under Section 232 on certain components increase sales. The demand for steel is growing, which contributes to the growth of consumption of alloyed alloys and forged products.

The electronics industry is also showing growth. Electrical equipment is already India's largest export category to the United States in value terms. Tariff reduction and cancellation of penalties