Exclusive Indian steel market: a benchmark for exporters

Steel production in India shows steady growth despite global trends

With markets in most regions of the world closed, India is becoming the most attractive market for steel products. Its import is growing amid an increase in local production and the commissioning of new steelmaking capacities. At the same time, prices for finished rolled products have positive dynamics.

The state’s wait-and-see attitude

Steel production in India increased by 6% in 2024, to 149 million tons. In January of this year, an increase of 6.8% was recorded, to 13.6 million tons. It is ensured by the launch of new capacities. In 2024, new steel enterprises with a total capacity of 15 million tons per year began operating in India. By 2030, it is planned to increase the steelmaking potential to 330 million tons per year in accordance with the state program National Steel Policy 2017. To implement it, it will be necessary to commission new steel plants with a capacity of at least 100 million tons per year.

The flow of steel imports is also steadily growing. According to the results of the 2023/2024 financial year, it soared by 38%, to 8.3 million tons. In the current financial year, the figure will be significantly exceeded, since 8.29 million tons of rolled products have already been imported in 10 months (April 2024 – January 2025), an increase of 20%. The main volume came from three countries.

In this regard, the steel industry association ISA insists on raising the basic duty on steel imports from 7.5% to 15%, complaining about the decline in margins of local producers. Indian steel companies are also concerned about a possible influx of foreign rolled products due to the 25% additional duty introduced in the United States on March 4.

In their opinion, this could redirect the emerging excess supply to India. S&P Global analysts calculated that for this reason, Indian steel could lose an average of $34.5/t. According to trade sources, Chinese products on the Indian market are currently cheaper than local ones by about $70/t. The presence of more favorable offers is restraining the price appetites of Indian producers. But for now, the dynamics remain favorable for them.

The cost of steel billets for January-February increased by 1% compared to December 2024, to $452/t. Ex Raipur, according to BigMint. Wire rod rose by 3.7% to $495/t. Ex Dungapur, rebar by 2.2% to $551/t, hot rolled coil by 3.3% to $557/t. (all – Ex Mumbai).

Therefore, the authorities are in no hurry to meet the wishes of the industry. On February 1, Finance Minister N.Sitharaman presented the draft state budget for the 2025/2026 financial year (ends on March 31, 2026) in parliament. The document provides for maintaining the existing basic duty rate on imported steel products at 7.5%. Probably, the government is afraid of the negative effect of protective measures on steel on other sectors of the economy.

«Duties can be raised to make Indian steel more profitable. At the same time, prices will obviously rise. Therefore, if duties on imported Chinese steel are introduced, then prices for steel products in India will rise, which is not conducive to the development of its industries that have a huge demand for steel,» – explains Zh. Gancheng, a researcher at Shanghai University, in a commentary to the Global Times. This means that the final decision will depend on the situation in key consumption sectors.

Consumers need more steel

Mordor Intelligence forecasts growth in the housing construction sector from $189.8 billion in 2024 to $272.67 billion in 2029. In this case, the growth will be an average of 7.5% per year. The assumption is based on the great need for housing due to urbanization processes and government programs that stimulate its availability for the population.

Among them is the Pradhan Mantri Awas Yojana, which provides housing to all those in need in large cities. It is expected that by 2030, about 400 million people will live in them. In addition, one can highlight the decision of the Securities and Exchange Board (SEBI), which reduced the down payment on the purchase of an apartment from $611 to $122.

Infrastructure projects are also on the list of priorities. In 2024, an average of 27 km of roads were laid per day in India. The government also announced the construction of several high-speed railways. Among them are Delhi-Varanasi (865 km), Delhi-Mumbai (1384 km) and Delhi-Kolkata (1459 km). The total length of the HSRW should reach 10 thousand km by 2030.

Large-scale construction is underway in the energy sector. In 2024, new power plants with a total installed capacity of 34 GW were put into operation, according to RenEn.

The emphasis is on the development of electricity production from renewable sources. In accordance with the state Energy Development Plan, renewable energy capacity should reach 500 GW by 2030 and 600 GW by 2032. By the end of 2024, the figure was 209.4 GW.

The drivers in the field of industrial construction include the National Steel Policy 2017 program. Its implementation also requires the deployment of additional capacities in the production of iron ore and coke.

The Indian auto industry is one of the rapidly developing industries. Even despite the slight decline that occurred last year.

Back in 2021, the production volume was 4.396 million units, in 2022 – already 5.456 million units, in 2023  – 5.843 million units, in 2024  – 5.313 million units.

With a large population and a growing middle class, the Indian car market has enormous sales potential. The localization strategy allows companies to produce cars at a lower price, making them accessible to a wider range of consumers.

Numerous government programs are increasing demand for electric vehicles across the country. To this end, most states provide road tax discounts of up to 75% and reimbursement of the cost of an electric vehicle in the amount of up to $115.

Mordor Intelligence estimates the volume of the Indian passenger car market in 2024 at $39.82 billion. According to the forecast, by 2029 it will reach a capacity of $53.04 billion. The average annual growth rate will be 5.9%. The results of the Indian auto industry in January of this year were encouraging. Production increased by 1.7% compared to the same period in 2024, to 406.2 thousand units, according to Autostat.

The volume of the home appliances market in India will also steadily increase in the coming years. Among the drivers are continued urbanization and growing demand for amenities in urban conditions. According to Mordor Intelligence, in 2024, sales of household appliances amounted to $27.27 billion. By 2029, the figure will reach $34.47 billion with an average annual growth rate of 4.8%.

Thus, almost all major steel consuming industries in India have positive dynamics and favorable forecasts. In this regard, the government has not yet increased the basic duty on steel imports. However, it keeps its finger on the pulse and is ready to intervene if necessary.