Report Overview

A significant increase in the number of large infrastructure development projects driven by rapid urbanization, growing adoption of renewable energy, and thriving automotive industry is expected to drive the India Steel Market during the forecast period between 2024 and 2030.

India Steel Market – Industry Trends & Forecast Report, 2030

India Steel Market size was estimated at USD 64.21 billion in 2023. During the forecast period between 2024 and 2030, the India Steel Market size is projected to grow at a CAGR of 6.89% reaching a value of USD 73.55 billion by 2030. Prominent drivers of the market are the growing population in expanding urban areas, thriving automotive sector, augmented spending on construction and infrastructure projects, and rising steel demand. According to the Indian Steel Association, the nationwide surge in steel demand will predominantly emanate from the construction sector, fueled by government emphasis on infrastructure and affordable housing through initiatives like 'Smart Cities' and industrial corridor development. This strategic approach aims to enhance connectivity, lower logistical costs, and promote well-distributed development across Indian states. Also, the 'Make in India' initiative is expected to fortify the steel industry's growth by positioning India as a global design and manufacturing hub along industrial and freight corridors. Several Indian states are anticipated to establish automotive and ancillary industries, positioning themselves as global manufacturing hubs for export-oriented small cars, aligning with the broader objectives of the initiative. The comprehensive outlook underscores the multifaceted drivers steering India's steel market towards robust expansion, encompassing economic, infrastructural, and manufacturing dimensions

By volume, the India Steel Market size was estimated at 165.56 million tons in 2023. During the forecast period between 2024 and 2030, the India Steel Market size is projected to reach the volume of 194.21 million tons by 2030. Presently, India boasts an operational capacity of 161 million tons and stands as the leading global producer of sponge iron. The per capita steel consumption in India has seen a rise, ascending from 57.8 kg in 2013-14 to 81 kg in FY23. Ambitiously, the nation aims to achieve 160 kg by 2030-31 and further elevate it to 220 kg by 2047. According to the Ministry of Steel, India has established formidable targets for its steel industry, setting sights on reaching a crude steel capacity of 300 million tons by FY31 and an even more ambitious goal of 500 million tons by FY2047.

Steel – Overview

Steel, an alloy of iron and carbon, possesses enhanced strength and fracture resistance compared to alternative iron forms. Additional elements may be incorporated, such as 11% chromium for corrosion-resistant stainless steels. Widely employed in diverse applications like buildings, infrastructure, tools, transportation, and weaponry, steel owes its popularity to high tensile strength and cost-effectiveness. The foundational material is iron, which exhibits two crystalline forms based on temperature: face-centered cubic and body-centered cubic. Both steel and cast-iron showcase distinctive properties resulting from interactions between different iron allotropes and alloying elements, primarily carbon. The addition of iron, carbon, and other elements serves as hardening agents, impeding dislocation movement in steel.

India Steel Market

Growth Drivers

Growing Number of Infrastructure Development Projects

The India Government’s initiatives such as "Housing for All," "Smart Cities Mission," and "Pradhan Mantri Awas Yojana" are pivotal drivers propelling infrastructure development in India. These programs play a crucial role in shaping growth in the residential and commercial building sectors, exerting a significant influence on the trajectory of the steel market. Simultaneously, the focus on regional airport development and enhanced connectivity, as part of the Union Budget's Udan initiative, aligns with the government's commitment to expanding infrastructure. India's thriving infrastructure and building industries, coupled with expanding real estate investments, contribute to robust industrial growth. According to India Investment Grid (IIG), a substantial percentage of upcoming projects, spanning residential, public, and commercial spaces, underscores the escalating demand for steel in sync with the country's growing infrastructure landscape.

Challenges

Volatile Raw Material Prices

The growth of the India Steel Market is constrained by volatile raw material prices. Fluctuations in the costs of essential inputs, such as iron ore and other alloys, pose growth challenges for the steel industry in the country. These uncertainties impact production costs, affecting profit margins and hindering overall market expansion. The steel sector remains sensitive to raw material price fluctuations, requiring strategic risk management and adaptability to navigate the dynamic market conditions.

Impact of Escalating Geopolitical Tensions on India Steel Market

The India Steel Market grapples with substantial consequences stemming from escalating geopolitical tensions. A palpable reduction in steel demand emerges as end users exercise caution, prompting steel companies to implement noteworthy price hikes. Notably, the price of hot-rolled coils has surged to a record high of INR 65,000 per ton. The Russian invasion of Ukraine and the resultant sanctions have catalyzed a surge in raw material costs, exacerbating prevailing challenges. Despite a domestic demand downturn, steel exports have experienced a notable uptick, rising by 42% to 1.16 million ton. This geopolitical upheaval reverberates across global supply chains, creating an environment where protracted periods of elevated steel prices may endure, casting a significant impact on the entire spectrum of the steel sector in India, from production to trade dynamics.

India Steel Market

Segmental Coverage

India Steel Market – By Product Type

By product type, the India Steel Market is divided into Structural Steel, Prestressing Steel, Bright Steel, Welding Wire & Rod, Iron Steel Wire, Ropes, and Braids segments. The structural steel segment holds the highest share in the India Steel Market by product type. Structural steel plays a pivotal role in the construction and advancement of infrastructure. Its exceptional strength and durability render it well-suited for erecting buildings, bridges, and other essential infrastructure elements. The persistent need for ongoing construction ventures, coupled with urbanization and renovation endeavors, serves as a substantial driver for the expansion of the structural steel sector. Meanwhile, the prestressing steel segment is expected to witness the fastest growth rate during the forecast period. Prestressing steel is a crucial element in crafting reinforced concrete structures capable of withstanding both tension and compression forces. Its extensive application is observed in the construction of bridges, highways, and tall structures. With the increasing requirement for durable and enduring infrastructure, the demand for prestressing steel is on a continuous upward trajectory, propelling the expansion of the market.

India Steel Market – By Application

Based on application, the India Steel Market is divided into Building & Construction, Electrical Appliances, Metal Products, Automotive, Transportation, Mechanical Equipment, and Domestic Appliances segments. The building & construction segment holds the highest share in the India Steel Market by application. It can be attributed to the intrinsic qualities of steel, a synthetic alloy falling under the ferrous metal category. Comprising iron, carbon, and other elements, steel is renowned for its robustness and endurance. The construction sector extensively utilizes steel due to its durability and strength, constituting approximately 40% of India's steel demand, as reported by the Joint Plant Committee (JPC) for the FY2021. Steel's prevalence in construction is further bolstered by government initiatives like the Pradhan Mantri Awas Yojna, Sardar Patel Urban Housing Project, and the 100 Smart Cities Mission, fostering the growth of the Indian steel industry. According to the Ministry of Steel (MOS) and JPC, India's steel consumption volume reached around 106 million metric tons in 2021, marking substantial progress. Initiatives like the National Bank for Financing Infrastructure and Development (NaBFID) and significant foreign direct investment (FDI) in infrastructure activities and construction further underscore the sector's potential. With infrastructure accounting for 13% of overall FDI inflows in FY 2021, the construction and building industry is poised for growth, subsequently amplifying the demand for steel in India during the forecast period

India Steel Market – By Region

Geographically, the India Steel Market is divided into North India, South India, East India, and West India regions. The East India segment holds the highest share in the India Steel Market and is expected to maintain its dominance during the forecast period. The prominence reflects a noteworthy shift in the industrial dynamics within the Indian steel sector. The East India region, encompassing states like Odisha, Jharkhand, and Chhattisgarh, plays a fundamental role in shaping and driving India's overall steel output. Factors such as policy focus, labor availability, and access to raw materials further contribute to the region's industrial robustness. As a result, the East India segment is expected to maintain its leadership, signifying its pivotal role in the future growth of the Indian steel industry.

Competitive Landscape

Major players operating in India Steel Market include JSW Steel, Tata Steel, Jindal Steel & Power, Steel Authority of India (SAIL), Jindal Stainless, Nippon Steel, Hyundai Steel, JFE Steel Corporation, APL Apollo Tubes Ltd, Electro Steel Castings Ltd, and Godawari Power & Ispat Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In July 2023 - Mr. Jyotiraditya Scindia, the Union Minister of India, disclosed Japan's keen interest in investing JPY 5 trillion (approximately USD 36 billion) across various sectors in India, with a focus on steel.

• In May 2023 - INOX Air Products committed to an INR 1,300 crore (USD 157.5 million) investment for establishing two air separation units, each with a daily capacity of 1,800 tons, at Tata Steel's Dhenkanal plant in Odisha.

Scope of the Report

By Product Type

• Structural Steel

• Prestressing Steel

• Bright Steel

• Welding Wire and Rod

• Iron Steel Wire

• Ropes

• Braids

By Application

• Building & Construction

• Electrical Appliances

• Metal Products

• Automotive

• Transportation

• Mechanical Equipment

• Domestic Appliances

By Region

• North India

• South India

• East India

• West India