New Delhi: The Government will continue to prioritise higher steel production and raw material security in the coming year, as India enters the final five years of its journey towards achieving an installed steelmaking capacity of 300 million tonne (MT) by 2030.
Alongside capacity expansion, the emphasis will remain on the adoption of low-carbon technologies, the development of green steel capacity and the production of special and high-end steel grades to meet the evolving needs of domestic industries and export markets, a steel ministry official said.
The push comes at a time when India is the world's second-largest crude steel producer, and steel demand continues to be supported by strong infrastructure spending, housing, railways, automobiles, defence manufacturing and capital goods under government initiatives such as PM Gati Shakti, National Infrastructure Pipeline, and Make in India.
However, the industry is also bracing for continued challenges in 2025, including rising imports, volatile raw material prices and global trade uncertainties. Imports, particularly from Asian markets, remain a concern for domestic producers despite safeguard and anti-dumping measures already in place.
In May 2017, the government unveiled the ambitious National Steel Policy (NSP), targeting the addition of over 200 MT of steelmaking capacity with investments estimated at around Rs 10 lakh crore.
The policy also envisages actual steel production of 250 MT and per capita steel consumption of 160 kg by 2030-31.
According to steel ministry data, India's steel production capacity rose from 97 MT in 2012-13 to 138 MT in 2017-18, and has since expanded steadily with significant brownfield and greenfield investments by both public and private sector players.
As per data research firm BigMint, India's installed steelmaking capacity was 235 MT as of November 2025, and it is estimated to remain at around the same levels by FY26. The production is projected at 167 MT against current levels of 110 MT. By March 2026, the per capita steel consumption is estimated at 107 kg, compared with 105 kg currently.
Based on these estimates, the country needs to add another 65 MT of capacity over the next five years to stay on track for the NSP targets.
A steel ministry official said the government has taken several steps to protect the domestic industry, including the imposition of safeguard duties and anti-dumping duties on imports of flat steel products from countries such as China and Vietnam.
To promote value-added steel, the ministry has rolled out the Production Linked Incentive (PLI) scheme, offering fiscal incentives for the manufacturing of high-end and speciality steel used in sectors such as defence, power transmission, renewable energy, automobiles and aviation.
The government is also focusing on strengthening raw material availability. "New reserves of coking coal are being explored, and we are engaging with resource-rich countries to diversify sourcing," the official said.
For iron ore, auctions are already underway, and steelmakers are encouraged to participate. The ministry is also promoting beneficiation and pelletisation of low-grade iron ore to improve resource efficiency.
With just five years left to meet NSP targets, industry leaders say momentum must accelerate.
Naveen Jindal, President of the Indian Steel Association (ISA), said India has made strong progress, but needs faster execution.
"The pathway ahead demands sustained demand creation, policy stability and bold investments. These will determine whether India not only meets its goals but sets a new benchmark in competitive, low-carbon steelmaking," said Jindal, who is also Chairman of Jindal Steel.
Industry body Assocham noted that while the government support has been significant, challenges such as rising coking coal costs, high logistics expenses, limited availability of railway rakes and infrastructure bottlenecks continue to weigh on the sector.
In the new year, Assocham expects a pickup in steel demand and does not anticipate further relaxation of quality control orders (QCOs). It also flagged growing trade barriers globally.
"Trade restrictions imposed by other countries on Indian steel exports are increasing. Some relief could emerge if free trade agreements with the EU and the US are concluded, supporting the domestic industry," it said.
On the green steel transition, PHDCCI Secretary General Ranjeet Mehta said it remains a highly capital-intensive industry, with greenfield capacity requiring very large investments per tonne.
Referring to the European Union’s Carbon Border Adjustment Mechanism (CBAM), he cautioned that as global demand shifts towards low-carbon steel, Indian producers, many of whom rely on coal-based blast furnace routes, could face competitiveness challenges unless decarbonisation accelerates through technologies like hydrogen-based DRI, increased scrap usage and renewable energy integration.
Meanwhile, ratings agency Icra has projected around 8 per cent growth in steel demand in FY26, although pricing pressures are expected to persist.
The industry has added a record 15 MT of capacity over the past three to four quarters, with another 5 MT likely by the end of FY2026. However, incremental demand of about 11–12 MT has lagged supply growth, creating a temporary surplus and softening domestic prices.
Commenting on price trends, Girishkumar Kadam, Senior Vice-President and Group Head, Corporate Sector Ratings, Icra, said domestic hot-rolled coil (HRC) prices have corrected sharply.
"Domestic HRC (hot rolled coils) prices have declined from Rs 52,850 per tonne in April 2025 to around Rs 46,000 per tonne by November 2025, trading below import parity. Despite healthy underlying demand, pricing remains under pressure due to global headwinds and elevated Chinese exports," Kadam said.
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