Indian exports of  downstream copper products, like copper bars, wires and tubes,  may come under pressure as the US moves to impose a steep 50 percent tariff on copper imports starting August 2025, analysts said.

On July 8, US President Donald Trump announced a steep 50 percent tariff on copper imports and warned of a massive 200 percent tariff on pharmaceutical products, to be enforced after a one-year grace period.

The announcement marks a sharp escalation in Trump’s protectionist trade agenda, which has increasingly targeted specific sectors with little warning.

In terms of copper ores, concentrates and refined copper, India is a net importer. However, it has a small export market for copper products since the domestic consumption of the red metal stands at 0.5–0.6 kg, below the global average of 3.2 kg, according to the Centre's  vision document published last week.

In FY24, domestic refined copper production stood at 0.509 million tonnes (MT), with India importing 0.363 MT and exporting 0.028 MT

"India exported around 0.2 MT million metric tonnes of copper products in FY2025, with the US accounting for ~12 percent, primarily in downstream segment like copper bars, wire, tubes etc. Any slowdown in US demand could moderate offtake and impact realisations," said Sumit Jhunjhunwala, Vice President, Sector Head, Corporate Sector Ratings, ICRA Ltd.

The most vulnerable export segment

As of now, the most vulnerable export segment include copper cathodes, anodes, wire rods, sheets, and alloy tubes — key categories that feed into the US electrical, automotive, and infrastructure sectors, analysts said.

"The US is currently India’s third-largest export destination for copper products, following Saudi Arabia and China. With the elevated tariff, Indian copper exports are likely to become substantially less competitive in the US market, leading to a potential decline in shipment volumes unless relief measures or preferential trade terms are secured," said Yash Sawant, Commodity Fundamental Analyst at Choice Broking.

"In the interim, Indian copper exports could face some disruption in trade flows, both in terms of market access and pricing power, potentially weighing on export revenues and industry sentiment in the near term," Sawant added.

Indian exporters may eventually redirect supply

Meanwhile, industry observers expect Indian exporters  to eventually redirect supply toward alternative markets or capitalise on the growing domestic demand in sectors like power, construction, and electric vehicles (EVs). However, such shifts will require time .  They also expect major exporters like China redirecting supply to India.

"Copper demand is pretty strong in India and we don't have enough smelting capacity. Smelting of Vedanta was shut down in 2017-18. Since then, we have been net importers. If imports of copper products increases in India, probably there will be some issue on demand and the pricing front,  because there will be a lot of supply and probably demand is steady. I don't see this happening in the near term," said Tushar Chaudhari, Research Analyst, PL Capital.

"Owing to limited US exposure, strong domestic demand and ability to redirect exports to other growing markets should keep the impact of US copper tariffs on Indian copper exporters muted," said Sanket Singh, Partner, Grant Thornton Bharat.

India’s Ministry of Mines, led by G Kishan Reddy, has already initiated consultations to assess the fallout of US tariffs and explore diplomatic or trade avenues to soften the blow. According to reports, India and the US have agreed to extend their timeline to finalise a bilateral trade agreement, pushing the original  July 9 deadline to the end of the month.

Source: Moneycontrol 

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