Growth rate of India’s steel production outpaces China’s: Report

Mumbai: India’s steel industry is rapidly advancing toward the government’s target of achieving 300 million tonnes per annum (MTPA) of crude steel capacity by FY2030-31, according to a private sector report released on Thursday.

The report highlights that the growth rate of steel production in India has outpaced both China and the global average. Between 2016 and 2024, India recorded a CAGR of about 5 per cent, compared to 2.76 per cent for China and 1.77 per cent globally.

Notably, while China’s steel production has been declining since 2020, India witnessed an accelerated CAGR of 8 per cent during this period. This divergence underscores India’s rising prominence in the global steel industry, supported by abundant raw materials, cost-effective labour, and enabling government policies, the report states.

As of FY2024-25, India has achieved an installed capacity of 205 MTPA, followed by proposed capacity expansion plans of 167 MTPA till 2031 by major steel players. However, the sector faces several challenges, including the need for iron ore beneficiation, an 85 per cent dependence on imported coking coal, limited availability of steel scrap, and high carbon dioxide emission intensity in the steelmaking process, according to the report by MP Financial Advisory Services LLP (MPFASL).

The report further notes that India’s steel consumption — currently at 93.4 kg per capita compared to the global average of around 219 kg — is expected to rise sharply, as India accelerates investments in infrastructure, affordable housing, and manufacturing. Bridging this consumption gap will necessitate a substantial increase in steel-making capacity, reinforcing the strategic need to achieve the 300-million-ton crude steel capacity target.

The report notes that while there are challenges, the 300 MTPA steel capacity target by 2030-31 would be achieved through a multi-pronged strategy, dependent on five critical levers — accelerated investments in green and value-added steel, infrastructure and raw material linkage improvements, clean technology adoption, policy reform for financing and approvals, and a strong public-private execution model.

Driven by rapid industrialisation and infrastructure-led growth, India’s steel production has surged in recent years, positioning the country as the second-largest steel producer globally, behind China, which accounts for over 50 per cent of the world’s output.

Currently the world’s second-largest steel producer, India is driving this transformation amid robust infrastructure demand, policy support, and global supply chain realignments, the report added.

IANS