New Delhi: The Government will continue to prioritise higher steel production and raw material security in the coming year as India enters the final phase of its journey toward achieving an installed steelmaking capacity of 300 million tonnes (MT) by 2030, a senior official from the Ministry of Steel said.
Alongside capacity expansion, the government’s focus will remain on the adoption of low-carbon technologies, development of green steel capacity, and production of special and high-end steel grades to meet the growing requirements of domestic industries and export markets.
Strong Demand Drivers Support Growth
India, currently the world’s second-largest crude steel producer, continues to see robust demand backed by infrastructure development, housing, railways, automobiles, defence manufacturing and capital goods. Government initiatives such as PM Gati Shakti, the National Infrastructure Pipeline, and Make in India are providing sustained support to steel consumption.
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Challenges Persist Despite Policy Support
However, the steel industry is preparing for continued challenges in 2025, including rising imports, volatile raw material prices and global trade uncertainties. Imports—especially from Asian markets—remain a concern for domestic producers, despite safeguard and anti-dumping duties imposed on flat steel products from countries such as China and Vietnam.
National Steel Policy Targets
The National Steel Policy (NSP), unveiled in 2017, envisages adding more than 200 MT of steelmaking capacity with investments estimated at ₹10 lakh crore. The policy targets steel production of 250 MT and per capita steel consumption of 160 kg by 2030–31.
According to official data, India’s steel production capacity increased from 97 MT in 2012–13 to 138 MT in 2017–18, and has since expanded through significant greenfield and brownfield investments by public and private sector players.
Capacity Addition Still Needed
As per data from research firm BigMint, India’s installed steelmaking capacity stood at 235 MT as of November 2025, and is expected to remain broadly unchanged by FY26. Steel production is projected to reach 167 MT, while per capita steel consumption is estimated to rise to 107 kg by March 2026.
Based on these projections, India needs to add around 65 MT of capacity over the next five years to remain on track with NSP targets.
Focus on Value-Added Steel and Raw Materials
To promote value-added steel production, the government has rolled out the Production Linked Incentive (PLI) scheme, offering incentives for manufacturing high-end and specialty steel used in defence, power transmission, renewable energy, automobiles and aviation.
The ministry is also strengthening raw material availability. New coking coal reserves are being explored, and sourcing is being diversified through engagement with resource-rich countries. Iron ore auctions are underway, and steelmakers are encouraged to participate. Beneficiation and pelletisation of low-grade iron ore are also being promoted to improve resource efficiency.
Industry Calls for Faster Execution
Industry leaders say momentum must accelerate in the remaining five years. Naveen Jindal, President of the Indian Steel Association (ISA), said sustained demand creation, policy stability and bold investments are critical for India to set global benchmarks in competitive and low-carbon steelmaking.
Industry body Assocham flagged challenges such as rising coking coal costs, logistics bottlenecks, limited availability of railway rakes and global trade barriers. It noted that free trade agreements with the EU and the US could provide relief to Indian steel exports.
Green Steel Transition a Key Challenge
On decarbonisation, PHDCCI Secretary General Ranjeet Mehta cautioned that green steel remains capital-intensive. He said Indian producers could face competitiveness challenges under mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM) unless adoption of hydrogen-based DRI, higher scrap usage and renewable energy integration accelerates.
Pricing Pressures Continue
Ratings agency Icra has projected around 8% growth in steel demand in FY26, though pricing pressures are expected to persist. The industry has added 15 MT of capacity over the past few quarters, with another 5 MT expected by FY26-end, creating a temporary supply surplus.
According to Icra, domestic hot-rolled coil (HRC) prices declined sharply from ₹52,850 per tonne in April 2025 to around ₹46,000 per tonne by November 2025, trading below import parity amid global headwinds and elevated Chinese exports.
Despite near-term challenges, the government remains confident that sustained policy support and investments will keep India on track toward becoming a globally competitive steel powerhouse by 2030.
