**Policy Summary: Lok Sabha Unstarred Question No. 3806 - Decline in Domestic Steel Demand (Answered 12.08.2025)**
This document summarizes the Indian Ministry of Steel's response to Lok Sabha Unstarred Question No. 3806 regarding the domestic steel demand, impact of imported Chinese steel, coal shortages, and GST reduction on steel.
**Domestic Steel Demand:** Contrary to the premise of the question, finished steel consumption in India increased from 136.3 Million Tons (MT) in FY 2023-24 to 152.1 MT in FY 2024-25, representing an 11.6% increase. This growth was observed across major steel-consuming sectors including building construction, infrastructure, automobile, defence, engineering, and packaging.
**Impact of Dumped Chinese Steel:** The steel sector is deregulated, with the government acting as a facilitator. Steel prices have decreased by approximately 11% over the past two years. Steel production increased by 5.5%, from 144.30 MT in 2023-24 to 152.18 MT in 2024-25. The government has implemented measures to boost domestic consumption and reduce imports, including:
* Implementation of the Domestically Manufactured Iron & Steel Products (DMISP) Policy.
* Launch of the Production Linked Incentive (PLI) Scheme for Specialty Steel.
* Infrastructure expansion through the Union Budget.
* Calibration of Basic Customs Duty (BCD) on input materials.
* Imposition of Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) based on investigations by the Directorate General of Trade Remedies (DGTR).
* Imposition of a provisional safeguard duty at 12% ad valorem for 200 days on imports of certain Non-Alloy and Alloy Steel Flat Products.
* Revamping of the Steel Import Monitoring System (SIMS).
**Impact of Coal Shortages:** Raw materials, including coking coal, are procured by steel companies based on techno-economic considerations. Data on production losses and cost escalation due to coal shortages was not explicitly provided.
**GST Reduction on Steel:** The response does not explicitly state whether the government intends to reduce the GST on steel. The government's focus is on facilitating the sector and promoting domestic consumption through the measures listed above.
**Minister of Steel:** Shri H.D. Kumaraswamy
Key Entities Referenced
Ministry of Steel: The Indian government ministry responsible for the development of the steel sector in India.
SHRI SAPTAGIRI SANKAR ULAKA: Member of LOK SABHA who raised the question about the decline in domestic steel demand.
SHRI H.D. KUMARASWAMY: The Minister of Steel who provided the answer to the question.
India: The country whose domestic steel demand and production is being discussed.
Domestically Manufactured Iron & Steel Products (DMISP) Policy: A policy for promoting 'Made in India' steel for Government procurement.
Production Linked Incentive (PLI) Scheme for Specialty Steel: A scheme to promote the manufacturing of 'Specialty Steel' within the country and reduce imports by attracting capital investments.
Basic Customs Duty (BCD): Duty on input materials such as scrap, ferronickel.
Anti-Dumping Duty (ADD): Duty imposed based on investigation by DGTR
GOVERNMENT OF INDIA
MINISTRY OF STEEL
LOK SABHA
UNSTARRED QUESTION NO. 3806
FOR ANSWER ON 12.08.2025
DECLINE IN DOMESTIC STEEL DEMAND
3806. SHRI SAPTAGIRI SANKAR ULAKA:
Will the Minister of STEEL be pleased to state:
(a) the reasons for the decline in domestic steel demand in FY 2024– 25, sector-wise;
(b) whether the Government has conducted an impact assessment of the continued
influx of dumped Chinese steel, if so, the details thereof and if not, the reasons
therefor;
(c) the impact of coal shortages on Steel Production and pricing with data on
production losses and cost escalation; and
(d) whether the Government intends to reduce GST on steel to boost infrastructure
projects, if so, the details thereof and if not, the reasons therefor?
ANSWER
THE MINISTER OF STEEL (SHRI H.D. KUMARASWAMY)
(a) The finished steel consumption in India for 2023-24 and 2024-25 were 136.3
Million Tons (MT) and 152.1 MT respectively, representing an increase of 11.6% in FY
2024-25 over the previous financial year. There has been an increase in steel
consumption across all major sectors consuming steel which include building &
construction, infrastructure, automobile, defence, engineering and packaging.
(b)to(d): Steel is a deregulated sector and the Government acts as a facilitator for
the development of steel sector in India. Steel prices have reduced by about 11% since
the last two years and production has increased by 5.5% from 144.30 MT in 2023-24
to 152.18 MT in 2024-25. Raw material, including coking coal, is procured by steel
companies on techno-economic considerations. Government has taken following
measures to facilitate the sector, boost domestic consumption and reduce imports:-
i. Implementation of Domestically Manufactured Iron & Steel Products (DMI&SP)
Policy for promoting 'Made in India' steel for Government procurement.
ii. Launch of the Production Linked Incentive (PLI) Scheme for Specialty Steel to
promote the manufacturing of 'Specialty Steel' within the country and reduce
imports by attracting capital investments.
iii. Thrust in the Union Budget to infrastructure expansion.
iv. Calibration of Basic Customs Duty (BCD) on input materials such as scrap,
ferro-nickel, etc.
v. Imposition of Anti-Dumping Duty (ADD) and Counter-Vailing Duty (CVD) based
on investigation by DGTR.
vi. Imposition of a provisional safeguard duty at the rate of 12% (twelve percent)
ad valorem for 200 days on imports of certain Non-Alloy and Alloy Steel Flat
Products.
vii. Revamping Steel Import Monitoring System (SIMS) for monitoring of imports to
provide granular details on imports to the domestic steel industry.
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