Steel production in India could rise by 8% y/y in the FY2026/2027 – forecast

In the 2026/2027 financial year (FY), steel production in India is set to rise by 8% year-on-year — to 183 million tonnes, up from 169 million tonnes in the 2026 FY. This is according to BigMint.

The rate of production growth will slow slightly compared to 11% y-o-y in FY2026. This is due to a more restrained expansion of capacity (forecast: +6% to 248 million tonnes in FY2027), reflecting producers’ cautious approach amid sustained pressure on margins and geopolitical risks (notably the conflict in the Middle East).

Thanks to the recent recovery in finished steel prices and improved profitability, capacity utilisation in FY2027 will rise to 75%.

Despite the Reserve Bank of India (RBI) lowering its forecast for India’s GDP growth from 7.6% to 6.9% y-o-y, domestic steel consumption in FY2027 will accelerate to 9% y-o-y (175 million tonnes) compared to 6% y-o-y in FY2026.

The main driver of the market is government funding:

1. Government capital expenditure. The allocation of 12.2 trillion Indian rupees from the budget for capital expenditure will help offset weak investment activity in the private sector.
2. Construction and infrastructure. These sectors will account for an 8 million tonne increase in steel demand. This positive trend is confirmed by cement producers (growth forecast: 7–8% y-o-y) and the expansion of the PM Awas Yojana housing programme, whose targets for FY2027 are three times higher than last year’s.

Steel consumption in engineering and industrial manufacturing will slow growth to 5 million tonnes (compared to 7 million tonnes in FY2026). This segment is being held back by high energy prices, inflation and disruptions to supply chains. However, the sector will be supported by government incentive schemes (PLI) and stable demand in the automotive sector.

At the India AI Impact Summit 2026, Secretary to the Ministry of Steel Sandeep Paundrik announced that steel consumption in the country has doubled over the last decade — from 77 million tonnes in 2014–2015 to 152 million tonnes in 2024–2025.

He confirmed the government’s long-term strategy, under which India’s steel production capacity is set to reach 300 million tonnes by the 2030/2031 financial year and 400 million tonnes by the 2035/2036 financial year.

As reported by GMK Center, BigMint forecasts that India will increase iron ore production by almost 8% year-on-year in the 2026/2027 financial year, to 340–345 million tonnes.  In the 2025/2026 financial year (which ended on 31 March), the country increased its ore production by 7% year-on-year to 310 million tonnes.