India is projected to increase iron ore production by 8% in FY2026/2027

According to BigMint’s forecast, India will increase its iron ore production by nearly 8% year-on-year in the 2026/2027 fiscal year—to 340–345 million tons (up from 316 million tons).

At the same time, the increase in supply will exceed demand from the country’s steel sector, and the additional volumes are unlikely to be fully absorbed by the domestic market.

The increase in production will be supported by the expansion of mining capacity, primarily by private players, while steel production growth remains moderate. Therefore, supply will likely shift to inventories or require redirection to export markets. This creates early pressure on the domestic market balance.

The state of Odisha will remain the main driver of increased iron ore production, notes BigMint. Production here is projected to rise to approximately 178 million tons in the 2026/2027 fiscal year, up from 162 million tons in the previous fiscal year. However, this concentration increases dependence on Odisha not only in terms of production but also logistics. Since additional supplies are concentrated in a single region, any disruptions in transportation or policy changes at the state level could have a disproportionate impact on overall supply availability.

Despite the increase in production volumes, systemic indicators suggest that this does not lead to stronger market results. Rising royalties and statutory fees increase the cost base for companies, limiting margin expansion. At the same time, demand from steel producers does not result in timely payments throughout the value chain.

Exports could provide a market for surplus production if domestic demand remains insufficient—shipments of fine ore and pellets from India have traditionally supported market balance, particularly through shipments to China. However, exports depend on global demand conditions and price competitiveness.

As a reminder, according to government data, India increased its ore production by 7% year-on-year in the 2025/2026 fiscal year (which ended on March 31), reaching 310 million tons.