Critical Minerals for Steel Tariffs, India Should Play its Cards Well

India can leverage its critical mineral reserves to ease US steel tariffs and secure better trade terms in ongoing bilateral negotiations

The India-US Bilateral Trade Agreement is still under intense negotiation, and it remains to be seen who will blink first or succumb to pressure.

US President Donald Trump’s tariff proposals are a maze. These include universal tariffs, country-wise tariffs, sector-wise tariffs, moratoriums or suspensions of implementation, and negotiated settlements.

In April, under Section 232 of the Trade Expansion Act, the US imposed a 25% tariff on steel imports, citing a national security threat. On June 4, the tariff on steel was doubled to 50%.

The US imports 20–22 million tonnes of finished steel a year, representing a fifth of its domestic demand. A quarter of these imports comes from Canada, followed by Brazil and Mexico.

India is a minor supplier of finished steel to the US. Indian export numbers present a mixed picture. Shipments have fluctuated widely over the last five years. From 51,000 tonnes in 2019–20, exports declined to 27,000 tonnes the following year. In 2021–22, they rebounded to 214,000 tonnes, then declined to 165,000 tonnes the following year, and fell further to 95,000 tonnes in 2023–24. Exports in 2024–25 were estimated at 140,000 tonnes.

The US has demanded that India accept the Section 232 tariffs on steel and that reductions are only possible through quotas. This has been the case with UK autos.

At the same time, depending on BTA negotiations, there is also the possibility of complete removal of steel tariffs on the grounds that Indian steel exports pose no national security threat to the US.

India continues to engage with the US to enhance and broaden bilateral trade ties in a mutually beneficial and fair manner. Both nations released a joint statement on February 13, 2025, reaffirming their commitment to deepening economic ties. Under the ambitious Mission 500, both countries aim to more than double bilateral trade to $500 billion by 2030, to be achieved by strengthening the trade relationship across multiple sectors, including steel.

Critical Leverage
While it is widely believed that the US is keen that India should open up the farm sector, India can attempt to soften Washington’s aggressive stand by offering critical minerals that it desperately needs.

This urgency stems from China, the world’s dominant producer of several critical minerals used in high-tech applications, restricting exports through a quota system. This is China’s way of responding to US tariff threats.

India produces a variety of minerals, some of which are considered critical minerals by the US due to their importance in various industries, especially in clean energy technologies and defence.

Here are some critical minerals that India produces and the US may be interested in:

Bauxite: India has the fifth-largest reserves of bauxite in the world and is a significant producer. Bauxite is the primary ore for aluminium, which is considered a critical material for energy by the US due to its use in various sectors, including lightweighting vehicles and in solar energy technologies.

Chromite: India ranks as the third-largest producer of chromite globally. Chromium, derived from chromite, is essential in producing stainless steel and other alloys, crucial for various industrial and defence applications.

Copper: India has substantial copper reserves. Copper is increasingly important for clean energy technologies, energy storage and electronics, and is listed by the US as a critical material for energy.

Graphite: India is among the top producers of graphite. Natural graphite is a critical material for lithium-ion batteries used in electric vehicles and energy storage.

Manganese: India has significant manganese ore reserves. Manganese is crucial in steelmaking and is also used in some battery technologies.

Mica: India holds some of the largest mica reserves globally. Mica is used in various electrical and electronic applications.

Titanium: India possesses reserves of titanium-bearing minerals like ilmenite. Titanium is vital for the aerospace and defence industries due to its high strength-to-weight ratio.

Also, India is the fourth-largest producer of iron ore globally. While iron ore itself is not always listed as a critical mineral, it is fundamental to steelmaking, which has implications for infrastructure and defence.

While India has reserves and production capabilities for these minerals, the actual quantities available for export and their specific grades might influence their attractiveness to the US.

Furthermore, some critical minerals like lithium and cobalt, essential for the energy transition, are areas where India is actively exploring and seeking to increase domestic production to meet its own rising demand.

The US has identified a list of critical minerals that are essential to its economic and national security and have vulnerable supply chains. This list includes over 50 minerals, encompassing those crucial for energy technologies, the ‘electric eighteen’.
Some of the minerals produced in India overlap with this US list, making India a potentially important partner in diversifying critical mineral supply chains.

India too has identified its own list of 30 critical minerals, including lithium, cobalt, gallium, copper, tin, nickel, silicon, phosphorus and potash, highlighting the importance of these resources for its economic development and energy transition goals. 
This underscores a domestic focus on securing these materials, which could also align with US interests in diversifying global supplies, particularly moving away from China.

The endowment of natural resources, such as critical minerals, is a strength. India should leverage this strength judiciously in the bilateral talks. It would make commercial sense for India to invite US investments and technology to responsibly exploit these natural resources without compromising national interest.