Odisha’s Aluminium Sector May Be Hit By Indo-US Tariff War

Bhubaneswar/New Delhi: Imposition of tariffs on Indian products exported to the US by the Donald Trump administration may pinch Odisha. The Aluminium sector in the state is likely to be impacted the most.

In reply to a question on the subject in the Rajya Sabha, Union minister of state for commerce and industry Jitin Prasada had stated on December 20, 2024 that Odisha exported Aluminium and Aluminium products worth nearly US$ 4,490 million in 2023-24.

While not all of this went to the US, a significant portion certainly did. After all, the US tops the list among countries to which India exports Aluminium and its products. According to industry sources, India exported Aluminium (and it’s products) worth more than US$ 890 million to the US in 2023-24. Much of this came from Odisha.

“Imposition of tariffs will pose a challenge. Producers can always look for other markets, but that takes time. Given the global economic scenario at the moment, difficulties are likely to increase if Indian Aluminium becomes non-competitive in the US. It is possible that other countries that produce far less quantities of Aluminium, will benefit from this tariff war,” an industry insider said.

Odisha’s Aluminium hub is in Angul, where NALCO also has a smelter. India is today the second largest producer of Aluminium after China and Odisha contributes to this in a big way. Odisha is the largest Aluminium producing state in India.

In his reply in Parliament, Prasada produced documents revealing that Odisha’s total exports in 2023-24 was valued at over US$ 11,932 million, up from about US$ 117 million in 2001-02. Odisha also exported over US$ 5,000 million of steel and iron ore in 2023-24. However, only a small portion of this went to the US. After all, India is not a major supplier of steel or iron ore to the US.

Another sector that may be impacted due to reciprocal tariffs is that of petroleum products. India is a major exporter of petroleum products to the US. In 2023-24, Odisha exported petroleum products worth over US$ 939 million. A good quantity went to the US.