Indian Metals and Mining Industry Analysis

The demand for minerals in India is expected to rise, driven by expanded electrification, economic growth, and infrastructural development. As the third-largest energy-consuming country globally, India’s power and electricity needs continue to surge, supporting increased demand for coal. Steel demand is projected to grow by around 10%, bolstered by the government’s focus on roads, railways, airports, and other infrastructure projects. By achieving self-reliance in producing specialty steel, India aims to move up the steel value chain, matching advanced steel-making nations like Korea and Japan.

The estimated value of mineral production for 2025-26 is Rs. 171,460 crore (US$ 18.68 billion), as against Rs. 152,431 crore (US$ 17.48 billion) during the corresponding period of FY25.

In FY26, crude steel production in India stood at 168.4 MT, while finished steel production reached 160.90 MT. Finished steel consumption during the same period was 163.7 MT.

In FY27 (April-June 2026), crude steel production in India stood at 42.06 MT, while finished steel production reached 40.99 MT. Finished steel consumption during the same period was 41.57 MT.

Iron ore production in FY26 stood at 312.50 million tonnes, compared to 289.40 million tonnes in FY25, while the total estimated production for FY26 is projected at 289.1 million tonnes.

Iron ore production stood at 61.38 million tonnes in FY27 (April-May 2026), compared to 52.99 million tonnes in same period of FY26.

During April-May 2026, global primary aluminium production stood at 12.12 million tonnes, while consumption reached 12.76 million tonnes, resulting in a 0.63 million tonne supply deficit, reflecting continued strength in global demand relative to production.

The domestic production of aluminium stood at 42.57 lakh tonnes in FY26.

The domestic production of aluminium stood at 7.15 lakh tonnes in FY27 (April-May 2026).

NALCO produced 39,289 Metric Tonne of Aluminium in May 2026.

BALCO produced 52,735 Metric Tonne of Aluminium in May 2026.

Vedanta Limited (Aluminium) produced 1,57,631 Metric Tonne of Aluminium in May 2026.

On August 3, 2026, Uzbekistan invited Indian companies to invest in mining, metallurgy and rare earths, highlighting opportunities in gold, copper, uranium and critical minerals. Around 400 Indian companies already operate there with projects exceeding Rs. 47,435 crore (US$ 5 billion), strengthening investment-led cooperation in the metals and mining sector.

On June 18, 2026, UBS turned selectively bullish on India’s metals and mining sector, favouring aluminium producers Hindalco and NALCO and maintaining a positive view on Coal India, citing earnings growth, supportive valuations and deleveraging potential, reflecting confidence in the sector’s near-term outlook.

On June 20, 2026, BHEL and Coal India announced a Rs. 25,000 crore (US$ 2.62 billion) investment in a coal gasification project in Odisha, strengthening India's metals and mining sector by promoting value-added coal utilisation, supporting fertiliser production, generating employment and boosting downstream industrial development.

The ET Infra Global Metals and Mining Meet 2026, held on February 18, 2026, in Kolkata, highlighted India’s positive transformation in the metals and mining sector, driven by policy reforms, critical minerals strategy, and sustainability goals. The event brought together over 300 delegates and 30+ speakers to discuss green mining, digital transformation, ESG compliance, and investment opportunities, aligning with the Viksit Bharat 2047 vision. It underscored India’s growing focus on resource security, global supply chains, and private participation, positioning the sector as a key enabler of economic growth and energy transition.

The Union Budget 2026-27, presented on February 1, 2026, has been viewed positively for India’s metals and mining sector, with experts highlighting that policy measures will accelerate domestic capacity creation and support a self-reliant industrial ecosystem. The budget emphasizes expanding mining and metals production, which is expected to boost demand for industrial machinery, generate skilled and semi-skilled jobs, and create downstream opportunities in heavy engineering and manufacturing. Overall, the developments signal long-term growth, stronger domestic value chains, and reduced import dependence in the sector.

On January 19, 2026, the Ministry of Mines announced a new government policy to boost India’s metals and mining sector by enabling the recovery of critical and strategic minerals from mine waste (tailings). The policy is based on the concept that minerals currently mined as primary ores can also yield valuable “companion minerals” (such as cobalt, gold, silver, and rare elements) from residues like tailings, slags, and anode slimes. It lays down guidelines to systematically explore both primary and secondary sources, improving resource efficiency and strengthening domestic mineral supply chains.

The government has introduced several policy measures to support mineral and metals production. In January 2025, the National Critical Mineral Mission was launched with a seven-year horizon and a proposed outlay of Rs. 16,300 crore (US$ 1.9 billion), aiming to secure strategic minerals for clean energy and advanced technologies. Mining and mineral policy reforms, operationalization of expired mines, and ease-of-doing-business initiatives are encouraging increased domestic production. Captive mines are now allowed to sell up to 50% of their annual output in the open market.

To encourage domestic specialty steel production, the Ministry of Steel introduced the PLI Scheme 1.1 in January 2025 for five product categories, to be implemented from FY26 to FY30. Meanwhile, export duties on iron ore and steel products have been adjusted, and import duties on certain coal and ferronickel products reduced to zero to balance domestic supply and protect local producers.

During the earnings call for Q2 FY26, Tata Steel plans a 7-7.5 million tonne capacity expansion across its Indian operations, with major brownfield projects at Kalinganagar, Neelachal, Meramandali, Ludhiana and Gamharia moving through planning and approval stages.

India plans to train 5.7 million workers by 2030 in the mining sector under the National Critical Mineral Mission to boost domestic critical mineral production and cut import dependence.

Between April 2000-March 2026, FDI inflows in the metallurgical industry stood at Rs. 1,20,932.23 crore (US$ 19.30 billion), followed by the mining Rs. 21,794.45 crore (US$ 3.54 billion), diamond & gold ornaments Rs. 9,962.78 crore (US$ 1.4 billion), and coal production Rs. 119.19 crore (US$ 27.73 million). The government also allows 100% FDI under the automatic route in mining and exploration of metal and non-metal ores.

Several strategic initiatives have been taken to strengthen India’s position in global mineral supply chains. The Geological Survey of India (GSI) has adopted advanced exploration technologies, while Khanij Bidesh India Limited (KABIL) is sourcing critical minerals from countries like Australia, Argentina, and Chile. Indian state-run companies-National Aluminium Co Ltd, Hindustan Copper Ltd, and Mineral Exploration Corp-have formed joint ventures to acquire overseas assets for lithium and cobalt production, critical for EV batteries. India has also signed agreements with Argentina and Kazakhstan for lithium and titanium production, expanding its global mineral footprint.

The construction sector’s Gross Value Added (GVA) at current prices was estimated at Rs. 27,99,847 crore (US$ 316.83 billion) for FY26 (FAE) against Rs. 26,27,009 crore (US$ 310.67 billion) for FY25 (PE). Given the projected rapid growth of residential and commercial real estate, demand for metals such as steel, aluminium, and zinc is expected to remain high. India’s strategic location, competitive production costs, and growing domestic and export markets provide a strong advantage for the metals and mining sector in the coming years.

India’s metals and mining sector is on a strong growth trajectory, driven by rising domestic demand, policy support, and global partnerships. Expanding electrification, infrastructure growth, and the clean energy transition are creating sustained opportunities across coal, steel, aluminium, and critical minerals. With continued reforms, increased exploration, and strategic overseas collaborations, India is well-positioned to strengthen its self-reliance, enhance value addition, and emerge as a leading global supplier of minerals and metals in the years ahead.