Advantage India
Robust
Demand
*In FY26 , finished steel production stood at 160.90 MT.
*India’s domestic steel demand is estimated to grow by 9-10% in 2025 as per ICRA.
Increasing
investments
*To achieve steel capacity build-up of 300 MT per annum by 2030, India would need to invest US$ 156.08 billion by 2030-31.
*According to KPMG India, on May 8, 2026, India’s steel sector crossed 200 MTPA capacity and is progressing towards the 300 MTPA target by 2030, with strong investment momentum driving large-scale expansion.
Policy
Support
*Under the Union Budget 2026-27, the government allocated Rs. 443.18 crore (US$ 50.1 million) to the Ministry of Steel.
*Recent policy support includes expansion of the PLI scheme (PLI 1.1 and 1.2), simplification of import procedures by removing NOC for non-QCO grades, calibrated suspension of select QCO standards, and logistics integration under PM GatiShakti to boost efficiency and investment.
Competitive
Advantage
*In FY26, crude steel production in India stood at 168.4 MT.
*India’s steel industry benefits from rich iron ore reserves in Odisha, Jharkhand, and Chhattisgarh, supported by integrated facilities, PLI incentives, and cost advantages.
*Easy availability of low-cost manpower and presence of abundant iron ore reserves make India competitive in the global set up.
Introduction
One of the primary forces behind industrialization has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a country's economic development because it is both a raw material and an intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it is the foundation of any economy. The Indian steel industry is classified into three categories - major producers, main producers, and secondary producers.
India is the world’s second-largest producer of crude steel, with an output of 168.4 MT of crude steel and finished steel production of 160.90 MT in FY26.
India’s domestic steel demand is estimated to grow by 9-10% in 2025 as per ICRA. According to the Ministry of Steel, finished steel consumption reached 164 MT in FY26, registering a 7-8% growth, driven by strong domestic demand from infrastructure, construction, railways, and manufacturing sectors.
India’s steel sector remains de-regulated, with the Government acting as a facilitator through policy support and institutional frameworks to enhance efficiency and growth. Guided by the National Steel Policy 2017 and schemes like the PLI for Specialty Steel, the sector is witnessing capacity expansion and investment momentum, with crude steel capacity reaching 200 MT in 2024–25 to 220 MT in 2025-26 and specialty steel output targeted to rise significantly by 2026–27.
The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India's manufacturing output.
The Indian steel industry is modern, with state-of-the-art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels.
Market Size
In the past 10-12 years, India's steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic.
In FY26, the consumption of finished steel stood at 163.7 MT.
In FY26, crude steel production in India stood at 168.4 MT.
In FY26, finished steel production stood at 160.90 MT.
Share of Secondary steel plants including MSMEs in crude steel capacity in FY25 stood at 47%.
India’s steel production capacity increased to 200.33 MT in FY25, and the figure is anticipated to rise to 300 MT by FY30. As of April 2025, India has huge iron ore reserves and can produce 700 MT per year and has the potential to be the second largest producer of iron ore globally.
In FY26 (provisional) the exports and imports of steel stood at 6.60 MT and 6.52 MT, respectively.
The top five exported products during this period were HR Coil/Strip, Pipes, GP/GC Sheets/Coil, Bars & Rods, and CR Coil/Sheets.
As of July 30, 2025, India’s green steel demand is forecasted to climb from negligible levels today to 4.49 million tonnes (MT) by FY30, driven by the construction sector, infrastructure and automobiles with projections rising to 24 MT by FY35, 73 MT by FY40 and peaking at 179 MT by FY50.
Investments
The steel industry and its associated mining and metallurgy sectors have seen major investments and developments in the recent past.
- Between April 2000-March 2026, Indian metallurgical industries attracted FDI inflows of Rs. 1,20,932.23 crore (US$ 19.30 billion).
Some of the major investments in the Indian steel industry are as follows:
- On May 5, 2026, India’s Production Linked Incentive (PLI) Scheme for Specialty Steel has realized Rs. 23,022 crore (US$ 2.42 billion) in investments, generating 2.4 million tonnes of specialty steel production and 13,264 direct jobs. The scheme has also created 24 million tonnes of specialty steel capacity, strengthening domestic manufacturing and reducing import dependence.
- On February 19, 2026, India’s steel sector is witnessing a fresh wave of investments through capital market activity, with around 10 steel and related companies planning to raise Rs. 5,000–7,000 crore (US$ 554.52- 776.31 million) via IPOs over the next 8–10 months. These fundraises reflect strong investor confidence driven by infrastructure demand and supportive policies, and the capital is expected to be used for capacity expansion, modernization, and growth of steel operations in the country.
- On February 18, 2026, India’s steel industry is expected to attract nearly Rs. 9.01 lakh crore (US$ 100 billion) in investments to achieve its 2030 capacity targets, supporting large-scale expansion, modernization, and a shift towards sustainable production technologies.
- On January 21, 2026, Tata Steel reiterated an investment of Rs. 11,000 crore (US$ 1.21 billion) in Jharkhand for green steel development, aimed at advancing low-carbon production, generating employment, and strengthening the regional industrial ecosystem.
- On March 28, 2025, AM/NS India has secured 890 hectares of land in Rajayyapeta, Anakapalli district, Andhra Pradesh for a new integrated steel mill with planned capacity of about 7 MTPA of crude steel, expanding beyond its Hazira operations to meet rising domestic demand.
- On July 7, 2025, Tata Steel signed a Memorandum of Understanding with Australia’s InQuik Group to bring modular bridge construction technology to India, using prefabricated steel formwork filled with concrete on site to enable faster, cost-effective, climate resilient and scalable bridge infrastructure, especially useful in remote regions.
- As of August 2025, JSW Steel and Japan’s JFE Steel are planning to jointly invest Rs. 5,845 crore (US$ 682 million) to expand capacity for cold-rolled grain-oriented electrical steel (CRGO) to 3,50,000 tonnes per annum by FY28 by scaling up the Nashik plant from 50,000 to 2,50,000 TPA and increasing the Vijayanagar unit’s capacity to 1,00,000 TPA.
- On August 18, 2025, JSW Steel and South Korea’s POSCO signed a non-binding Heads of Agreement to explore setting up a 6 MTPA integrated steel plant in India via a 50:50 joint venture with Odisha among the key locations under consideration. Feasibility studies, resource availability and investment terms yet to be finalised.
- Under the second round of the Production Linked Incentive scheme (PLI) for specialty steel, 25 companies committed Rs. 17,000 crore (US$ 1.98 billion) to produce high-end steel domestically, aiming to reduce imports and boost self-reliance. The scheme targets five key steel product categories with applications across various industries like automobiles and transformers.
- India and Japan held the third Steel Dialogue on Feb 4, 2025, in New Delhi, discussing economic trends, steel trade, and industry developments. India highlighted policy initiatives, green steel efforts, and investment opportunities for Japan.
- In February 2025, during the Bengal Global Business Summit, about 50% of the Rs. 26,000 crore (US$ 3.02 billion) investment proposals received by Jharkhand government in Kolkata pertain to the steel sector.
- In February 2025, JSW Group announced a Rs. 1,00,000 crore (US$ 11.60 billion) investment to set up a 25 MT steel plant in Maharashtra's Gadchiroli district over seven to eight years. The project, expected to be the world's largest and most eco-friendly, will drive economic growth and job creation in Vidarbha.
Government Initiatives
Some of the other recent Government initiatives in this sector are as follows:
- On May 5, 2026, the Government announced key initiatives to promote low-carbon steel, including a Rs. 20,000 crore (US$ 2.10 billion) CCUS outlay under Union Budget 2026-27 and continued implementation of the Steel Scrap Recycling Policy, 2019 to strengthen sustainable steel production in India.
- On January 12, 2026, India’s steel exports grew by nearly one-third during April–December 2025, supported by government measures aimed at boosting domestic production and exports, reflecting improved competitiveness and policy backing for the sector.
- December 26, 2025 The government is sharpening its focus on increasing steel output and ensuring raw material security as India moves toward its 2030 capacity targets. Key initiatives include securing coking coal supplies, strengthening supply chains, and encouraging investments across the steel value chain.
- In November 2025, India’s Ministry of Steel launched the third round of the PLI Scheme for Specialty Steel (PLI 1.2) to attract new investment in advanced steel products with incentives of 4% to 15% on incremental sales and broaden high-end steel capacity to support domestic manufacturing and global competitiveness.
- Indian government plans to reduce imports by 50% in FY26 to become net exporter of steel in the near future. The Directorate General of Trade Remedies (DGTR) has recommended a 12% provisional safeguard to protect domestic players from surge in imports and potentially increasing their profitability. This development could potentially lead to a decrease in imports and increase market competitiveness.
- Up to December 2024, RINL dispatched about 1,400 MT of steel to Northeast projects, including National Highways Authority of India (NHAI) and National Highways and Infrastructure Development Corporation Limited (NHIDCL). Plans are in progress to set up a two-tier steel distribution network in Guwahati.
- Union Minister Mr. H. D. Kumaraswamy launched Steel Import Monitoring System 2.0 (SIMS 2.0) on July 25, 2024. SIMS 2.0 improves data transparency, quality control, and integration with government portals to support steel sector growth and better import management.
- The Union Ministry of Steel launched PLI Scheme 1.1 on January 6, 2025, with a Rs. 6,322 crore (US$ 733.40 million) outlay to boost specialty steel production and attract investments. Covering five key product categories, the scheme eases norms to reduce imports, enhance domestic manufacturing, and improve energy efficiency, with applications open until January 2025.
- In February 2024, the government has implemented various measures to promote self-reliance in the steel industry.
- In July 2021, the Union Cabinet approved the production-linked incentive (PLI) scheme for specialty steel. The scheme is expected to attract investment worth ~Rs. 400 billion (US$ 5.37 billion) and expand specialty steel capacity by 25 million tonnes (MT), to 42 MT in FY27, from 18 MT in FY21.
- Under the Union Budget 2023-24, the government allocated Rs. 70.15 crore (US$ 8.6 million) to the Ministry of Steel.
- In addition, an investment of Rs. 75,000 crore (US$ 9.15 billion) (including Rs. 15,000 crore (US$ 1.83 billion) from private sources) has been allocated for 100 critical transport infrastructure projects for last and first mile connectivity for various sectors such as ports, coal, and steel.
- The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intends to create a globally competitive steel industry in India. NSP 2017 envisage 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030-31.
- The Ministry of Steel is facilitating the setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs. 200 crore (US$ 30 million).
- The Government of India raised import duty on most steel items twice, each time by 2.5% and imposed measures including anti-dumping and safeguard duties on iron and steel items.
Road Ahead
The steel industry has emerged as a major focus area given the dependence of a diverse range of sectors on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India. With the industry accounting for about 2% of the nation's GDP, India ranks as the world's second-largest producer of steel and is poised to overtake China as the world's second-largest consumer of steel. Both the industry and the nation's export manufacturing capacity have the potential to help India regain its favourable steel trade balance. The Government of India’s Production Linked Incentive (PLI) scheme for specialty steel has witnessed strong progress, with investment commitments exceeding Rs. 43,800 crore (US$ 4.83 billion) and additional commitments of around Rs. 11,887 crore (US$ 1.34 billion) under PLI 1.2, reflecting robust industry participation on February 9, 2026 and November 4, 2025. The initiative, including its third round, is focused on expanding capacity, with an expected addition of 8.7 million tonnes by FY31, while promoting high-grade and emerging steel categories such as CRGO steel, super alloys, and coated products. This is expected to strengthen domestic manufacturing, reduce import dependence, support key sectors like defence and infrastructure, and enhance India’s global competitiveness in advanced steel production.
Tata Steel reaffirmed its long-term growth strategy focused on expanding capacity, strengthening its product portfolio, and investing in advanced and sustainable steel production capabilities in India in 2025. The company will prioritise investments in volume growth, value-added downstream products, mining assets and infrastructure, along with low-carbon steelmaking technologies. Additionally, the Board approved in-principle expansion of Neelachal Ispat Nigam Limited by 4.80 million tonnes and initiated plans to enhance flat steel capacity through new facilities.
The National Steel Policy, 2017 envisage 300 million tonnes of production capacity by FY31. The per-capita consumption of steel stood at 100 kgs in FY26 (April-August 2025) and the National Steel Policy aims to increase it to 160 kgs by FY31. While, in FY23, per capita consumption of steel in rural India was estimated to be between 21.3 kg per annum.
Huge scope for growth is offered by India's comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.
References: Media reports, press releases, Press Information Bureau (PIB), Joint Plant Committee (JPC), Union Budget 2023-24, DPIIT, Ministry of Steel
FAQs
The iron and steel industry in India has an installed crude steel production capacity of 220 MT in FY26, while finished steel production reached 160.9 MT. Capacity is targeted to expand to 300 MT by FY30 under the National Steel Policy.
Major steel producing states in India include Odisha, Jharkhand, Chhattisgarh, Karnataka, Maharashtra, and West Bengal. These states benefit from abundant iron ore reserves, integrated steel plants, and strong industrial infrastructure.
The steel industry in India is driven by strong demand from infrastructure, construction, railways, automobiles, and manufacturing. Abundant iron ore reserves, policy support, and capacity expansion are further strengthening long-term industry growth.
The Indian steel industry has witnessed robust demand growth, with finished steel consumption reaching 164 MT in FY26, registering 7–8% annual growth. Infrastructure development and manufacturing expansion continue to support higher steel consumption.
The Government is supporting the steel industry in India through the National Steel Policy 2017, the PLI Scheme for Specialty Steel, the Steel Scrap Recycling Policy, SIMS 2.0, and initiatives promoting green steel, capacity expansion, and raw material security.
The Indian steel sector is attracting significant investments in specialty steel, green steel, integrated steel plants, and capacity expansion. Major companies such as Tata Steel, JSW Steel, AM/NS India, and POSCO are driving new projects across the country.
The steel industry in India ranks as the world's second-largest crude steel producer and is among the fastest-growing steel markets globally. Strong domestic demand is expected to make India the world's second-largest steel consumer in the coming years.
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