IBEF – India Steel Sector, 2023

The India Steel Sector is expected to experience growth in the coming years due to various factors. The demand for steel from different sectors is expected to drive the industry forward. In particular, the consumption of steel by India's infrastructure segment is projected to increase by 11% by FY26. The automotive sector is also expected to contribute to the growth of the steel industry, as there is a rising demand for automobiles. One key development that will impact the steel sector is the new Vehicle Scrappage policy, which will help reduce steel prices by enabling the recycling of materials used in old vehicles. Additionally, steel producers are surpassing their capacities to produce oxygen cylinders for COVID-19 patients, highlighting the industry's role in the healthcare sector. The government has implemented initiatives such as the Smart Cities' Affordable Housing and industrial corridors to further boost the steel industry. Under the Pradhan Mantri Awas Yojana (Urban), it is estimated that around 158 lakh metric tonnes (MT) of steel will be consumed in the construction of houses. In terms of production, India recorded 45.39 MT of crude steel and 43.01 MT of finished steel in FY24. In CY22, crude steel production reached 124.5 MT, with finished steel production standing at 117.6 MT. In FY23, crude and finished steel production reached 125.32 MT and 121.29 MT, respectively. As of July 2023, crude steel production in India was 11.52 MT, while finished steel production was 10.53 MT. The Steel Authority of India Limited (SAIL) achieved its best-ever annual production in the financial year 2022-23, recording 18.289 MT of crude steel production, representing a growth of 5.3% compared to the previous best. SAIL's crude steel production in FY22 stood at 17.36 MT, with saleable steel production at 16.9 MT. Furthermore, the capacity of the steel industry has increased to 142.29 MT in FY20, with expectations of reaching 300 MT by 2030-31. This indicates a positive outlook for the future of the India Steel Sector.