P&G Sources More Steel from India for Gillette Razor to Counter Rising Tariff Costs

Moving steel sourcing to India will reduce P&G's reliance on costlier Japanese and Swedish steel under Trump's new tariffs.

By Thea Felicity

Dec 05 2024, 08:26 AM EST

Procter & Gamble Report Sales Surge Of 6 Percent — LOS ANGELES, CALIFORNIA - JULY 30: Gillette razors, a Procter & Gamble product, are displayed for sale in a pharmacy on July 30, 2020 in Los Angeles, California. Procter & Gamble reported a sales surge of 6 percent, its strongest annual sales gain since 2006. Mario Tama/Getty Images

Gillette razor maker, or Procter & Gamble, is shifting their efforts when it comes to steel sourcing in a bid to avoid massive tariffs on steel imports that US President-Elect Donald Trump is likely to impose after taking office.

Now, Gillette's stainless steel is very specialized, and only a handful of companies in the world manufacture it in such volumes. To overcome a possible price increase due to tariffs, P&G has taken the decision to source more steel from Indian manufacturer, Jindal Stainless, where prices are known to be very competitive.

Reuters reported that P&G used to source its steel from Japan and Sweden, whose prices were higher. However, tariffs introduced during the first term of Trump have made all these options costlier. Their new Indian manufacturer is 20-25% cheaper, which will help in the cost-saving efforts of the company as it attempts to further solidify among new players such as Dollar Shave Club and Harry's.

P&G Tariff Under Trump

During Trump's first term, the company incurred expensive costs in the form of tariffs amounting to $1.4 billion in external expenses, per WCPO 9 News. To reduce such risks in the future, P&G has focused on diversifying its suppliers and reducing its dependence on costlier steel imports from Japan and Sweden. It turns out P&G is seeking protection against the impact of the tariffs by opting for Jindal, which has been producing steel for razor blades since more than 15 years.

Jindal Stainless, located in New Delhi, has been a long-time supplier of P&G for markets worldwide, although it exports to the US only from 2022. P&G has imported large quantities of steel from Jindal during the last three years. This is one of the relationships built by the company as a part of its overall approach to reduce costs.

Jindal has a strong performance record which P&G executives applaud the company for its dependability and value, while the latter has helped it to strengthen its business operation despite the rising costs of other areas.

Buying more steel from India is a strategy P&G has decided on in its efforts to keep prices at a manageable level and to continue to lead in the razor market.