THEBUSINESSBYTES BUREAU
MUMBAI, AUGUST 16, 2026
India’s steel industry is entering a defining new phase, with
surging domestic demand set to push steel consumption to an estimated 192
million tonnes by 2030 from 149 million tonnes in FY25. But the next chapter of
the country’s steel story is unlikely to be measured by volumes alone. A
sharper focus on high-value products, cleaner production and sophisticated
price-risk management is expected to determine how effectively Indian
steelmakers convert rising demand into sustainable growth.
According to a new report by the Multi Commodity Exchange of
India Limited (MCX), India’s steel consumption is projected to expand at a
compound annual growth rate of around 6-7 per cent through 2030. While
infrastructure and construction will remain the backbone of this expansion,
emerging demand from renewables, electric vehicles and capital goods is
expected to accelerate the shift towards more specialised and higher-value
steel.
Construction and infrastructure currently account for about
59 per cent of India’s steel consumption and are expected to contribute nearly
60-63 per cent of total demand by 2030. The report estimates that the country’s
infrastructure pipeline alone could unlock an additional 25-30 million tonnes
of steel demand as bottlenecks related to logistics, financing and project
execution gradually ease.
The opportunity for Indian steelmakers, however, extends well
beyond producing more tonnes. The report highlights a persistent mismatch
between domestic demand and the availability of advanced, application-specific
grades, even as India’s steel exports remain concentrated largely in
lower-margin products.
Government support through the specialty steel
Production-Linked Incentive scheme is helping address this structural gap. PLI
1.0-1.2 represents more than Rs 55,000 crore in committed investments,
strengthening the industry’s ability to develop sophisticated grades for
emerging sectors and reduce dependence on imports.
“The product story is
no longer about tonnes, it is about fit-for-purpose output,” the report said,
underlining the changing nature of India’s steel opportunity. Indian mills are
increasingly developing products tailored to the requirements of renewable
energy, electric mobility and capital goods, opening significant scope for the
industry to increase the value generated from every tonne of steel produced.
Yet, the rapid expansion of steel production also brings a
formidable environmental challenge. India’s steel sector currently has an
emissions intensity of around 2.55 tonnes of carbon dioxide per tonne of crude
steel, considerably higher than approximately 1.4 tonnes in the US and around
1.9 tonnes in the European Union.
The report noted that the share of blast furnace-based production is projected to increase from 42 per cent to 56 per cent by 2030, making decarbonisation an increasingly urgent priority as output rises. Steelmakers are therefore pursuing a combination of renewable energy, energy-efficiency measures, greater scrap utilisation, green hydrogen and carbon-capture technologies to bring down the sector’s carbon footprint.
The findings, released during the Global Commodity Conclave in Mumbai last week, point to an industry at an important crossroads. With demand set to climb sharply, India’s steel sector has the opportunity to emerge not merely as a larger producer but as a more technologically advanced, value-driven and environmentally responsible global steel powerhouse.
