New Delhi, February 17: To meet the Indian government’s steel target of 300 million metric tonnes (mn MT) by 2030, India’s crude steel capacity must grow at a compounded annual growth rate (CAGR) of 8 per cent, according to a report by HDFC Securities. As of the end of FY24, India’s crude steel capacity stood at 180 mn MT, reflecting an 11 per cent year-on-year (YoY) growth. The Ministry of Steel aims to increase this capacity to 300 mn MT by 2030 and 500 mn MT by 2047.
The report notes that India’s crude steel production grew at a CAGR of 5 per cent between FY19 and FY24. In FY24 alone, production surged 13 per cent YoY to 144 mn MT, leading to an overall capacity utilization of 80 per cent. The private sector accounted for 83 per cent of total production.
However, production growth has slowed in the current fiscal year. From April to November 2024, crude steel production grew only 4 per cent YoY, attributed primarily to rising steel imports. In FY24, finished steel imports rose sharply by 38 per cent YoY to 8.3 mn MT, with the bulk of imports coming from South Korea, China, Japan, and Vietnam. The domestic steel industry is calling for a safeguard duty on imported steel to curb the dumping of cheap steel, particularly from China.
On the demand side, India’s steel consumption has shown strong growth, with domestic consumption expanding at a 7 per cent CAGR over the past five years, far outpacing the global average of 1 per cent. In FY24, steel consumption surged 14 per cent YoY to 136 mn MT, and demand has remained robust in FY25, with consumption rising 11 per cent YoY in the first nine months of the fiscal year.
The report emphasizes the need for consistent capacity expansion to meet rising domestic demand while addressing the challenges posed by increasing steel imports. With strong growth prospects, India’s steel industry remains a key driver of the country’s infrastructure and manufacturing sectors.