Coconut shell-based activated carbon manufacturers are bracing themselves for the 26 per cent tariff imposed by US President Donald Trump, which could squeeze demand for Indian products in the US market.
The US is one of the leading importers of India’s activated carbon, with the current import duty at four per cent. However, after the new tariff kicks in, India will be at a disadvantage in comparison with competing countries. The lower tariff of 17 per cent for the Philippines and 24 per cent for Malaysia, will give US buyers the option to import from these countries, said Joshy Joseph, Director, INDCARB, the Palakkad-based manufacturer and exporter of activated carbon.
Indian manufacturers, according to him, are already facing difficulties in selling the product in the US market on account of an over 100 per cent hike in raw material prices due to the shortage of coconut and coconut shells. Charcoal is now trading at ₹70,000 per tonne, compared with ₹28,000 last year.
Chinese alternative
The high price of coconut shell charcoal may compel end-users in the US water industry to shift to coal-activated carbon as coal can be sourced cheaply from China, with the country facing a slump in demand from its metal/ steel production units. If many end-users in the US divert to coal-activated carbon, Indian producers will be unable to sell their products in the US markets, he added.
He said the higher rate on India’s main competitive countries such as Thailand at 36 per cent, Indonesia 32 per cent and Sri Lanka at 44 per cent is a positive factor.
However, Joshy Joseph doesn’t expect an immediate impact as the domestic production has dipped with many units under the threat of a shutdown due to raw material shortage. When availability increases here, the end-users in the US may shift to coal carbon. Moreover, the Indian companies will struggle to sell the products if there is a declining demand for carbon from gold mines, he said.
Activated carbon is mainly used in the water, gas and air purification industries, and its other applications are in cosmetics and in air-conditioner filters. Of the total exports of India’s coconut products, the share of activated carbon was ₹2,108 crore in 2023-24, he said.
Published on April 7, 2025