Trump Says His Tariffs Bought Essar's $18 Billion Iowa Steel Mill — Filings Show What Onshoring Actually Cost the Indian Companies That Went First

Trump Says His Tariffs Bought Essar's $18 Billion Iowa Steel Mill — Filings Show What Onshoring Actually Cost the Indian Companies That Went First

Essar Group will build what the US President called the "largest steel plant in history" in Iowa, at a reported cost of $15–18 billion. Trump credited his tariffs, and the framing since has been that tariffs are pulling Indian capital into American factories.

Essar is privately held, so there is nothing to read. But several NSE-listed companies already ran this experiment and had to report results to shareholders — and the most useful number belongs to Hindalco.

The control experiment: what a US plant actually costs

Hindalco's subsidiary Novelis is building a greenfield rolling and recycling mill at Bay Minette, Alabama — per its February 2024 investor release, "the first fully integrated aluminum plant built in the U.S. in nearly 40 years." Capacity is 600kt: 420kt of contracted beverage packaging, 180kt mainly automotive.

Now the cost. The April 2023 presentation put it at $2.5 billion; by February 2024, $4.1 billion. On the November 2025 earnings call, CEO Steve Fisher said Novelis "now estimate the total project capital cost will be in the order of $5 billion" — and named the causes: "inflation, both traditional inflation as well as tariffs, and higher costs due to competition for contractors and labor given the number of significant construction projects going on in the U.S."

Tariffs and a US construction boom made the tariff-dodging plant costlier to build.

The return went with it. Asked whether a mid-teens IRR project had become single-digit, CFO Devinder Ahuja conceded: "we will drop a slightly below double-digits, but we are going to be above the cost of capital." Novelis has spent $2.2 billion through Q2 FY26; commissioning begins in 2H CY2026.

The FY26 annual report shows the day job got harder: shipments fell 5% to 3.557 million tonnes and adjusted EBITDA came in at $462 per tonne "excluding impact of tariff and Oswego fires" — against a long-term target of $600.

The small-cap that pulled its US plant forward by two years

Jash Engineering, a ₹800-crore-revenue water infrastructure maker, owns Rodney Hunt Inc. in the US, acquired for US$4 million per its February 2024 presentation. Its May 2025 call sized the exposure precisely: of Rodney Hunt's US$34 million revenue, purchases from India were "only 31%," and of those only ₹30–40 crore faced the new tariff, costing "₹8–10 crore" at 25%.

Then it escalated. On the August 2025 call, Chairman Pratik Patel said the tariff was 25% plus 25% on stainless steel and "as of two days back, this has become 50% already." The response: "during my visit to the US in June... we decided to defer the plan to build the office, and instead... first build the plant in Houston. This plant was originally scheduled for 2028 but will now be completed in 2026." The goal: lift the US plant's share of Rodney Hunt revenue from 30–35% to 65–70%.

The chaos cost real money. By February 2026, Patel guided to losing "around ₹60–70 crores in revenue at Rodney Hunt," against consolidated revenue of ₹775–800 crore. His diagnosis is the sharpest line in any of these filings: "We were never affected by the tariff. You are affected by the uncertainty of tariff — you do your costing considering 0% and then 25% is applied. Then 25%, and then 50% is applied." A threatened 500%, he said, "stopped us from taking any major orders in America."

The one that walked away

Sansera Engineering got close and stopped. On its August 2025 call, MD B.R. Preetham clarified: "No, we haven't bought anything in USA... we were on the verge of due diligence for a particular site in North Carolina near Raleigh, but we had put it on hold because of the tariff uncertainty." By February 2026 it was still waiting on "what final tariff will come."

The ones with no reason to move

TD Power Systems told investors in August 2025 that customers "are prepared to pay between 15% to 25% more for power generation products" because there is no local alternative: "For power generation equipment, very little is manufactured in the US... We are probably the only non-European or non-Japanese company which is supplying to the US market in a big way." Its threshold of customer pain: 25–30%.

Rajratan Global Wire is blunter. On its April 2026 call, MD Sunil Chordia noted the company falls under Section 232, "where US has put tariff against all the imports, whether it is coming from India or Thailand or China or Mexico. So we are at par with all other countries. So it is not affected." No capex required.

Welspun Living, meanwhile, already builds there: its FY26 annual report cites "higher utilisation at our Ohio facility and the commencement of operations at our Nevada facility."

What retail investors should do

Treat "we're building in America" as a cost disclosure, not a growth announcement. Hindalco's filings show the arithmetic: a US greenfield plant doubled in budget, partly because of tariffs, turning a mid-teens IRR into a below-double-digit one management defends only as exceeding the cost of capital. The question is not Bay Minette's strategic logic but whether $5 billion earns its keep — track FY26's $462/tonne against the $600 target.

For smaller names, check whether tariff exposure is actually large before rewarding a US capex plan. Jash put the directly tariffed slice at ₹30–40 crore of purchases, while its bigger hit — ₹60–70 crore of revenue — came from uncertainty, not the duty. Its February 2026 presentation also flags an India-US trade deal letting it clear goods at 25%, with 18% expected on ratification. If that holds, onshoring urgency fades, and firms that committed capital at 50% may have overpaid for insurance.

Most importantly, ask whether the US buyer has an alternative. TD Power and Rajratan pass tariffs through or meet rivals on equal terms — the cheapest answer to a trade war.

Data sourced from company filings on NSE via Xaro.