**Executive Summary**
This report details the Indian steel industry's robust performance during the 2025-26 financial year, during which it consolidated its position as the world's second-largest producer. Driven by a 10.7% growth in production and a 35.9% surge in exports, India successfully transitioned back to a net exporter status. The sector aims to expand total capacity to 300 million tonnes by 2030 despite ongoing challenges regarding energy security and fluctuating raw material costs.
**Key Points / Main Content**
**Production and Domestic Demand**
* Crude steel production reached approximately 168.4 million tonnes, representing a year-on-year increase of over 10.7%.
* Finished steel consumption grew by 7–8% to 164 million tonnes, fueled by urbanization and government infrastructure projects in railways, construction, and manufacturing.
**Trade Performance**
* Exports of finished steel surged by 35.9% to 6.6 million tonnes, strengthening India's market presence in Europe, Southeast Asia, and the Middle East.
* Steel imports saw a significant decline of 31.7%, assisting the country in regaining its net exporter status.
**Capacity and Investment**
* Current steel capacity stands at 220 million tonnes, with a projected target of 300 million tonnes by 2030.
* Major industry players, including SAIL, Tata Steel, and JSW Steel, are actively investing in technology upgrades, capacity expansion, and value-added production.
**Market Challenges and Pricing**
* While steel prices recovered in early 2026 after a three-year decline, profitability remains under pressure from volatile coking coal costs and global price fluctuations.
* Increased logistics and freight costs due to geopolitical crises have further impacted industry margins.
**Energy and Supply Chain**
* Gas supply disruptions from the Middle East caused shortages of industrial fuels like LPG, threatening production continuity.
* The sector remains vulnerable to global shocks, rising energy costs, and supply chain instabilities.
**Impact Analysis**
**Major Steel Producers (SAIL, Tata Steel, JSW Steel)**
**Impact**
These entities experienced significant growth in production and export footprints but faced squeezed profit margins due to high raw material costs and freight expenses.
**Action Required**
Continue investing in capacity expansion, technology upgrades, and green steel technologies to meet the 2030 production targets.
**The Indian Government / Ministry of Steel**
**Impact**
The government acted as a critical stabilizer by intervening in the energy crisis through increased LPG allocations to the steel sector.
**Action Required**
Maintain policy support and continue the push for large-scale infrastructure projects to sustain domestic steel demand.
**Indian Railways and Logistics Providers**
**Impact**
Increased industrial activity led to higher freight movement of iron ore and finished steel, contributing to growth in India's eight core industries.
**Action Required**
Support the sustained momentum of industrial consumption by managing increased logistics and freight requirements across regions.
**International Markets (Middle East, Europe, Southeast Asia)**
**Impact**
These regions experienced a higher influx of Indian steel products as India diversified its markets and improved its product competitiveness.
**Action Required**
Navigate the shift in trade balance as India consolidates its position as a primary global supplier.
Key Entities Referenced
Ministry of Steel: The central government ministry responsible for overseeing the growth, capacity expansion, and performance of the Indian steel sector.
Joint Plant Committee (JPC): The official agency providing the data for production, consumption, and trade statistics used to assess the steel industry's performance.
Indian Railways: The key logistics entity supporting the steel sector through the movement of iron ore and finished steel products.
Ministry of Steel
Indian Steel Industry Shows Strong Growth Amid
Emerging Challenges in 2025-26
Posted On: 08 APR 2026 4:00PM by PIB Delhi
The Indian steel industry delivered a robust performance in the financial year 2025–26,
consolidating its position as the world’s second-largest producer while navigating global
uncertainties and price pressures.
Driven by strong domestic demand and expanding infrastructure activity, the sector recorded
impressive gains in production, consumption, and exports.
Strong Growth in Production and Demand
India’s crude steel output continued its upward trajectory in 2025–26, growing by over 10.7%
year-on-year to around 168.4 million tonnes during April–March, reflecting sustained industrial
momentum.
Domestic demand remained the key growth driver with finished steel consumption (164 MnT),
expanding by about 7–8%, driven supported by increased activity in infrastructure,
construction, railways, and manufacturing sectors. The government’s continued push on large-
scale infrastructure projects and urbanisation played a pivotal role in boosting steel
consumption during the period.
Export Surge and Improved Trade Balance
A major highlight of FY 2025–26 was India’s strong export performance. Finished steel exports
surged by 35.9%, reaching over 6 million tonnes during April–March (6.6 MnT), while imports
declined sharply by 31.7%.
This shift enabled India to regain its position as a net exporter of steel, strengthening its
footprint in global markets such as the Middle East, Europe, and Southeast Asia.
The growth in exports was also supported by diversification of markets and improved
competitiveness of Indian steel products.
Capacity Expansion and Investment Momentum
The industry witnessed continued investments aimed at expanding production capacity. India’s
total steel capacity, at about 220 million tonnes in FY 2025 – 26 and is projected to reach 300
million tonnes by 2030, supported by both public and private sector investments.
Major players such as SAIL, Tata Steel and JSW Steel continued to invest in capacity
expansion, technology upgrades, and value-added steel production, reflecting confidence in
long-term demand growth.
Stable Prices but Margin PressuresSteel prices in India followed a downward trend over the past three years before recovering in
early 2026.
However, profitability remained under pressure due to fluctuating raw material costs, especially
coking coal, and volatile global prices. Increased logistics and freight costs also affected
margins towards the end of the year due to geo-political crisis.
Emerging Challenges: Energy Crisis and Supply Disruptions
Disruptions in gas supplies from the Middle East led to shortages of industrial fuels such as
LPG, threatening production continuity for several steel manufacturers.
The government intervened by increasing LPG allocations to key sectors, including steel, to
cushion the impact and maintain output levels.
Additionally, rising energy costs and supply chain disruptions highlighted the sector’s
vulnerability to global shocks.
Logistics and Domestic Momentum
Strong domestic demand also translated into higher logistics activity. Indian Railways (reported
increased freight movement of iron ore and finished steel) and growth in the eight core
industries in India (include Refinery Products, Electricity, Steel, Coal, Crude Oil, Natural Gas,
Cement, and Fertilizers) indicated sustained industrial activity and consumption across regions.
This trend underscores the steel sector’s critical role in supporting India’s broader economic
growth.
Outlook
Looking ahead, the Indian steel industry is expected to maintain its growth momentum, with
production projected to rise further and demand remaining robust. However, the sector will
need to navigate challenges related to energy security, input costs, and global market volatility.
With continued policy support, infrastructure expansion, and investments in green steel
technologies, the industry is well-positioned to remain a key pillar of India’s industrial and
economic development.
Source: - Provisional JPC data for FY 2025-26.
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AG
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