Highlights

• India remains the world’s second-largest steel producer with rising global share.
• Finished steel consumption more than doubled to 163.7 MT in FY26.
• Government initiatives and PLI scheme support domestic capacity and value-added production.

India’s steel sector continues to expand its global presence, retaining its position as the world’s second-largest producer since 2018. The country’s share in global crude steel production increased from 5.2% in 2014 to 7.9% in 2024, reflecting sustained capacity expansion and competitiveness.

Domestic demand has been a key driver, with finished steel consumption rising from 77 MT in FY15 to 163.7 MT in FY26. Growth has been supported by infrastructure development, urbanisation, and manufacturing activity. India is also the second-largest consumer of finished steel globally, indicating a strong domestic market base.

Production Trends Across Steel Categories

Steel production in India has shown consistent growth across categories. Crude steel output increased to 168.4 MT in FY26, reflecting a steady rise from earlier years and a CAGR of around 9% between FY22 and FY26.

Finished steel production reached 160.9 MT in FY26, up 9.7% year-on-year, while consumption stood at 163.7 MT, registering a 7.6% increase.

Other key inputs such as hot metal, pig iron, and sponge iron also recorded growth in FY26. Production of hot metal rose 7.3%, pig iron increased 6.6%, and sponge iron output grew 9.1% during April–September FY26.

Trade Dynamics and Export Growth

India’s steel trade profile has shifted towards higher exports and lower imports. Steel exports increased by 29.1% year-on-year in March 2026, while imports declined by 9.5% during the same period.

For FY26, finished steel exports rose by 35.8%, while imports declined by 46.47%. Major export destinations included Vietnam, Belgium, and Taiwan, collectively accounting for over half of outbound shipments. This trend reflects improved domestic capacity and reduced reliance on foreign supply.

Policy Support and PLI Scheme Impact

Government initiatives have played a role in strengthening the steel sector. The Production Linked Incentive (PLI) scheme for specialty steel has supported investment and domestic manufacturing.

Key outcomes include ₹23,022 crore in investment, 2.4 million tonnes of specialty steel production, and over 13,000 direct jobs. The scheme also contributed to capacity creation of 24 MT and import substitution worth ₹6,000 crore.

The PLI framework continues to evolve, with additional phases targeting advanced steel categories and encouraging further investment and technology adoption.

Infrastructure, Logistics and Domestic Manufacturing Push

Policies such as the Domestically Manufactured Iron and Steel Products (DMI&SP) framework and the “melt and pour” rule aim to increase domestic value addition and reduce import dependence.

Infrastructure initiatives under the PM GatiShakti Masterplan and development of steel zones are improving logistics efficiency. Construction and infrastructure sectors account for about 68% of steel consumption, underlining their importance as demand drivers.

Decarbonisation and Green Steel Transition

India’s steel sector is also aligning with sustainability goals. The country targets net-zero emissions by 2070, with green steel initiatives focusing on reducing carbon intensity.

The introduction of a green steel taxonomy defines low-emission steel production benchmarks. As of March 2026, 89 steel units have received green certification, covering 12.34 MT of production.

Government initiatives include carbon capture technologies, renewable energy adoption, hydrogen-based steelmaking pilots, and increased scrap utilisation. These measures aim to reduce emissions and improve resource efficiency.

Key Risks

• Dependence on infrastructure demand cycles may impact steel consumption trends.
• Volatility in raw material prices can affect production costs and margins.
• Global trade dynamics may influence export competitiveness and pricing.
• Transition to green steel may require significant capital investment and technology adoption.

Summary

India’s steel sector continues to expand with rising production, consumption, and exports. Policy support, including PLI incentives and infrastructure initiatives, has strengthened domestic capabilities and reduced import dependence.

Growth across steel categories reflects increasing demand from infrastructure and manufacturing sectors. At the same time, the industry is progressing towards decarbonisation and green steel production aligned with long-term sustainability goals.

FAQs

Q: What is India’s position in global steel production?
A: India is the second-largest steel producer globally and has maintained this position since 2018.

Q: How has steel consumption changed in India?
A: Finished steel consumption has more than doubled, reaching 163.7 MT in FY26 from 77 MT in FY15.

Q: What role does the PLI scheme play in steel sector growth?
A: It supports investment, boosts specialty steel production, and encourages domestic manufacturing and job creation.