India Steel Market Outlook to 2028

India Steel Market Overview

The India steel market was valued at 103 million metric tons in volume based on the historical data of past five years. The market's growth is driven primarily by robust demand from sectors like construction, automotive, and infrastructure development, fueled by increased government spending on mega projects such as highways and housing. Steel's critical role in infrastructure development, along with urbanization, continues to drive the market forward.

Some of the leading players in the India steel market include Tata Steel, JSW Steel, Steel Authority of India Limited (SAIL), Jindal Steel & Power, and Bhushan Steel. These companies dominate the domestic market with a wide range of products catering to both domestic and international demand. Their extensive production capacities and strategic investments in modernizing steel plants have helped them maintain leadership positions in the market.

In 2024, Tata Steel announced plans to expand its Kalinganagar plant by 5 million tons per year, with a total investment of INR 23,500 crore (around USD 2.83 billion). The expansion is part of Tata Steel's strategy to meet the growing demand for high-grade steel, particularly in sectors such as automotive and infrastructure, which aligns with your statement about catering to increasing demand.

The state of Odisha is the dominant player in Indias steel production in 2023. This dominance is due to its rich iron ore reserves, estimated at one third of Indias total, and the presence of major steel players like Tata Steel and Jindal Steel. In 2023, Odisha produced over 70 million tons of steel, benefiting from favorable policies and infrastructure development by the state government.

India Steel Market Segmentation

The India Steel market is segmented into various factors such as product type, End User Industry and Region etc.

By Product Type: The market is segmented by product type into flat steel, long steel, and tubular steel. Flat steel held a dominant market share, primarily due to its widespread use in the automotive and construction industries. The rising demand for electric vehicles (EVs) and lightweight materials further boosted the growth of flat steel, driven by the increasing number of infrastructure projects across the country.

Product Type

Market Share (2023)

Flat Steel

55%

Long Steel

35%

Tubular Steel

10%

By End-User Industry: The market is segmented by end-user industry into construction, automotive, and machinery manufacturing. The construction sector dominated the market share, fueled by the governments Smart Cities Mission and other large-scale infrastructure projects, driven by increasing demand for steel in electric vehicle production.

End-User Industry

Market Share (2023)

Construction

60%

Automotive

25%

Machinery

15%

By Region: The steel market in India is geographically segmented into North, South, East, and West.

The Eastern region dominated the market share. This is attributed to the regions proximity to major raw material sources such as iron ore and coal mines, especially in states like Odisha and Jharkhand, with contributions from construction and manufacturing activities.

Region

Market Share (2023)

East

40%

West

30%

North

15%

South

15%

India Steel Market Competitive Landscape

Company

Established

Headquarters

Tata Steel

1907

Mumbai, India

JSW Steel

1982

Mumbai, India

SAIL

1954

New Delhi, India

Jindal Steel & Power

1979

Hisar, India

Bhushan Steel

1987

New Delhi, India

JSW Steels Sustainability Initiatives
JSW Steel plans to invest INR 15 billion to achieve a 25% reduction in carbon emissions by 2027. The company is set to implement hydrogen as a reducing agent in steel production. They have partnered with JSW Energy to establish a green hydrogen plant with a capacity of 3,800 tonnes per annum at their Vijayanagar facility, expected to be operational within 18-24 months

SAILs Modernization Drive: In 2023, SAIL initiated a modernization and expansion plan, which is part of its broader strategy to enhance productivity and reduce operational costs across its facilities. The modernization project at the Bhilai Steel Plant is part of a larger investment plan of INR 70,000 crore aimed at increasing its overall crude steel production capacity to 50 million tonnes per annum (MTPA) in the coming years.

India Steel Industry Analysis

Growth Drivers

Rising Infrastructure Investments: In 2024, the Indian government allocated INR 10 trillion for infrastructure projects, including highways, railways, and ports. This substantial investment is expected to drive steel demand by increasing the consumption of long and flat steel products for construction purposes. The National Infrastructure Pipeline (NIP), aimed at completing 7,400 projects by 2025, will boost steel demand as many of these projects require significant amounts of steel.

Increasing Automotive Production: In 2024, the production of vehicles in India is projected to cross 35 million units, driving the demand for steel in the automotive sector. The increased production of electric vehicles (EVs), which are lighter and require high-strength steel, is expected to boost the steel industry, especially for flat steel products used in vehicle bodies and parts. Leading automobile manufacturers have already increased their steel procurement to cater to the rising consumer demand.

Renewable Energy Expansion: The expansion of renewable energy projects, particularly wind and solar, is projected to consume more than 5 million tons of steel annually by 2025. Steel is a key material in the construction of wind turbines, solar panels, and transmission towers. The governments plan to achieve 500 GW of renewable energy capacity by 2030 will further drive demand for steel products required in green energy projects.

Challenges

Rising Input Costs
The cost of raw materials, particularly iron ore and coking coal is increasing steel production costs. Additionally, global disruptions in the supply of coking coal from Australia and South Africa have further inflated prices, directly affecting the profitability of steel producers. Securing a stable supply of raw materials remains a significant challenge for the industry.

Logistics and Transportation Issues
Inefficiencies in logistics and transportation have increased the cost of moving steel products within India. In 2024, it was estimated that the logistics cost in India was around 14% of GDP, which is significantly higher than the global average. Delays in rail and port infrastructure projects have compounded transportation issues, making it challenging for steel manufacturers to deliver products efficiently.

Government Initiatives

National Steel Policy 2017: The National Steel Policy sets a production target of 300 million tons of steel by 2030, with a focus on increasing domestic capacity and reducing carbon emissions. In 2024, the government announced crucial investment to upgrade outdated steel plants with energy-efficient technologies. This policy encourages sustainable production practices and aims to position India as a global leader in steel production.

Gati Shakti Plan: The PM Gati Shakti National Master Plan was launched by the Prime Minister in October 2021 as a digital platform to bring 16 Ministries together for integrated planning including highways, railways, and urban infrastructure. This initiative is expected to increase steel consumption and coordinated implementation of infrastructure connectivity projects.The plan aims to provide multi-modal connectivity for the movement of people, goods and services, facilitate last mile connectivity, and reduce travel time.

India Steel Market Future Outlook

The India steel market is expected to grow exponentially, driven by continued growth in construction, real estate, and heavy industries. With an investment in greenfield projects and the increasing emphasis on renewable energy, steel will continue to be a critical material. Furthermore, initiatives like the National Steel Policy, which targets humongous production by 2030, will significantly contribute to market expansion.

Future Trends

Increased Investment in Automation: Indian steel manufacturers are expected to invest heavily in automation technologies to increase operational efficiency and reduce labor costs. By 2027, it is projected that more than one third of steel plants in India will implement AI-driven systems to monitor and optimize production processes, leading to enhanced productivity and reduced energy consumption.

Expansion of Specialty Steel Production: The specialty steel market is expected to grow substantially in the next five years, driven by demand from sectors such as defense, aerospace, and renewable energy. Indias production of specialty steel is projected to increase, supported by government incentives and technological advancements that enable the production of high-performance steel for critical industries.
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