The minerals demand is likely to increase driven by expanded electrification and overall economic growth in India. Being the third largest energy consuming country in the world, there is always increased demand for power and electricity in the country, and hence the surge in demand for coal. Demand for steel is likely to grow by ~10% as the government’s augmented focus on infrastructural development continues with increased construction of roads, railways, airports, etc. By becoming Aatmanirbhar in producing speciality steel, India will move up the steel value chain and come at par with advanced steel making countries like Korea and Japan.
In FY25, coal production saw a quantum jump to 1000 MT in FY25 as compared to 997.25 MT in FY24 with a growth of about 2.75%.
In FY25 (Provisional), the number of reporting mines in India stood at 1,973. Reporting metallic mineral mines decreased from 799 to 772, while non-metallic mineral mines declined from 1,247 to 1,201.
India is the 2nd largest Aluminium producer, 3rd largest lime producer and 4th largest iron ore producer in the world.
In April-December 2024 period, the production of crude steel stood at 112.011 MT and that of finished steel was 107.192 MT.
During FY25 (April-December), export of finished steel and Iron ore stood at 5.09 MT. During FY25 (April-December), export of Finished Steel stood at 3.600 MT showing a decline of 24.6% over the previous year. India was a net importer of finished steel with overall trade deficit of 3.824 MT
India is expected to surpass its steel production capacity target of 300 MT by 2030, reaching an estimated 330 MT. The steel sector experienced a remarkable 14% growth in CY24, significantly outpacing the GDP growth rate of 6.5% to 7.0%, highlighting its robust momentum.
India's iron ore production increased by 0.18% to 277.83 million metric tonnes (MMT) during FY25 compared to 275 MMT in the same period of FY24.
India's iron ore production increased by 3.0% to 182.6 million metric tonnes (MMT) during FY25 (April-November), compared to 172.2 MMT in the same period of FY24.
India is the second-largest producer of aluminium globally. The production of aluminium stood at 3.15 million tonnes in FY25 (Until December). The production of primary aluminum reached 42.0 lakh tons in FY25 as compared to 41.5 lakhs in the previous year.
ICRA has estimated the domestic aluminium demand growth to remain healthy at around 9% in the next two fiscal years, given the Government’s thrust on infrastructure development.
The Global Primary Aluminium production for the FY25 is projected to reach 72.631 million tons against world consumption of 72.776 million tons, resulting in a projected market deficit of 0.145 million tons.
Aluminium production in India stood at 3.47 MT between April-January FY24. The world production of primary Aluminium during the same period was about 59.562 MT. The share of India in the world primary Aluminium production was around 5.8% during this period.
Between April 2000- March 2025, FDI inflows in the metallurgical industry stood at Rs. 1,13,540 crore (US$ 13.29 billion), followed by the mining Rs. 21,541 crore (US$ 2.52 billion), diamond & gold ornaments Rs. 8,964 crore (US$ 1.05 billion), and coal production Rs. 120 crore (US$ 14.00 million).
In January 2025, the Ministry of Steel has introduced the PLI Scheme 1.1 for specialty steel, covering five product categories, which aligns with the existing PLI Scheme. This initiative aims to encourage greater participation in response to industry requests for relaxation. The PLI Scheme 1.1 will be open for applications from January 6 to January 31, 2025, and will be implemented from FY26 to FY30.
The construction sector’s Gross Value Added (GVA) at current prices was estimated at Rs. 15,59,160 crore (US$ 179.5 billion) for FY25* against Rs. 14,36,081 crore (US$ 165.3 billion) for FY24 as per the provisional estimates.
GVA from mining and quarrying stood at Rs. 3,47,271 crore (US$ 40.69 billion) in FY25, as per the first revised estimates.
In FY25, mineral production is estimated at Rs. 1,41,061 crores (US$ 16.40 billion).
The index of mineral production of the mining and quarrying sector for FY25 was at 124.9.
In Union Budget 2025-26, capital investment outlay for infrastructure is being increased by 11.1% to Rs. 11.2 lakh crore (US$ 129.0 billion). To encourage higher private participation, the government has proposed various measures.
Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 enabled captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market.
Import duty on Anthracite/Pulverized Coal Injection (PCI) coal, Coke, and Semi-coke and Ferro-Nickel were reduced to zero. Export duty on Iron ores/ concentrates and iron ore pellets was raised to 50% and 45% respectively. In addition, 15% export duty was imposed on pig iron and several steel products.
In November 2024, India and Kazakhstan have launched IREUK Titanium Limited, a joint venture to produce Titanium Slag in India, marking India's first venture in Central Asia. The company will convert low-grade Ilmenite into high-grade titanium feedstock, aiming to enhance the titanium value chain in India and create jobs in Odisha.
In February 2024, an MoU has been signed between India and the Republic of Cote d'lvoire, for collaboration in field of Geology and Mineral Resources.
Extensive growth in electric vehicles, renewables, modern infrastructure, energy efficient consumer goods and greater dependence on strategic sectors such as aerospace defence, will drive Aluminium consumption to grow at a CAGR of more than 10%.
Production of steel in India could go up to 500 million tonnes by 2050, nearly four times the current output, as New Delhi seeks to undergird its evident growth ambitions with rapid capacity expansion for the primary infrastructure alloy, a senior executive at mining major BHP said.
As per data from the Ministry of Statistics and Programme Implementation (MOSPI), India's mining GDP increased from Rs. 76,877 crore (US$ 9.25 billion) in the third quarter of FY23 to Rs. 82,680 crore (US$ 9.95 billion) in the third quarter of FY24.
In March 2024, Karnataka and Rajasthan initiated the auction of Exploration Licences (EL) for critical and deep-seated minerals, marking the first such auction in India. Under the amended Mines and Minerals (Development and Regulation) Act, 1957, introduced by the MMDR Amendment Act, 2023, 29 critical minerals are eligible for exploration and mining concessions.
In February 2024, the Union Cabinet approved the amendment to the Mines and Minerals (Development and Regulation) Act,1957 specifying royalty rates for 12 critical minerals, thus completing the rationalization process for all 24 strategic minerals. This move aims to streamline the mining sector and auction processes, aligning with recent amendments to the MMDR Amendment Act, 2023.
In January 2024, India and Argentina signed an agreement to undertake the exploration and development of five lithium blocks, enhancing India's efforts in sourcing lithium. Khanij Bidesh India Limited (KABIL) has obtained exploration and exclusivity right for these five blocks.
In December 2023, the Ministry of Mines proposed capping performance security and upfront amounts for mining critical minerals to attract more bidders. Currently based on a percentage of the Value of Estimated Resources (VER), the move aims to reduce barriers to participation in auctions and expedite the process for mining leases.
In October 2023, the Union Cabinet approved the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, specifying royalty rates for three critical minerals: Lithium, Niobium, and Rare Earth Elements (REEs) paving the way for the auctioning of blocks for these minerals, as outlined in the MMDR Amendment Act, 2023.
On August 3, 2023, the Rajya Sabha passed the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 which seeks to make amendments to the Offshore Areas Mineral (Development and Regulation) Act, 2002 (‘OAMDR Act’). The Bill was passed by Lok Sabha on August 1, 2023.
In July 2023, the Union Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act-1957 to allow the mining of lithium and other minerals.
In February 2023, Tata Steel and Central Building Research Institute (CBRI), a constituent of the Council of Scientific and Industrial Research (CSIR), signed an MoU to collaborate on research, academic growth, and sustainable solutions in mining.
Innovative mineral exploration activities using state-of-the-art technology by Geological Survey of India (GSI), stepped up efforts by Khanij Bidesh India Limited (KABIL) to source strategic minerals from countries like Australia, Argentina, and Chile.
Three Indian state-run companies, National Aluminium Co Ltd, Hindustan Copper Ltd and Mineral Exploration Corp formed a joint venture to buy mining assets overseas that have minerals such as lithium and cobalt, which are used in the manufacture of batteries for electric vehicles.
Government has taken various steps to increase production and availability of iron ore, which inter-alia include Mining and Mineral Policy reforms to ensure enhanced production, early auction & operationalization of expired mines, ease of doing business, seamless transfer of all valid rights & approvals, incentivizing for starting of mining operation & dispatch, transfer of mining leases, allowing captive mines to sell up to 50% of the minerals produced, enhancing exploration activities, etc.
India will be the "stand-out growth market" for aluminium consumption in the coming years as it pursues construction projects to resolve an infrastructure deficit, which sees usage more than tripling to 9.5 million tonnes by 2030 from 2.6 million tonnes in 2021.
Rise in infrastructure development and automotive production are driving growth in the metals and mining sector in India. India has a vast mineral potential with mining leases granted for a longer duration of 50 years. As of FY22, the number of reporting mines in India were estimated at 1,319, of which reporting mines for metallic minerals were estimated at 545 and non-metallic minerals at 775.
The government plans to monetise assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.
Government of India has allowed 100% Foreign Direct Investment (FDI) in the mining sector and exploration of metal and non-metal ores under the automatic route, which will propel growth in the sector. Power and cement industries also aiding growth in the metals and mining sector.
India holds a fair advantage in production and conversion costs in steel and alumina. Its strategic location enables export opportunities to develop as well as fast-developing Asian markets. There is a sizable potential for new mining operations in the iron ore, bauxite, and coal, as well as considerable potential opportunities for subsurface deposit discoveries in the near future. Steel, zinc, and aluminium producers continue to benefit from attractive commercial prospects spurred by infrastructure initiatives. Iron and steel make up a core component for the real estate sector. Given the industry's projected rapid expansion in the residential and commercial building sectors, demand for these metals is expected to remain high.
