India Eyes 300 Million Ton Steel Goal by 2030

India is set to exceed its ambitious target of 300 million tons of steel production by the year 2030, with the government expressing optimism regarding the ongoing capacity expansion in the country’s steel sector. According to Steel Secretary Sandeep Poundrik, major integrated steel producers (ISPs) such as JSW Steel, Tata Steel, and Steel Authority of India Limited (SAIL) are leading the charge in boosting domestic production capacity. JSW Steel, for instance, aims to increase its capacity from 33 million tons to 50 million tons by 2030. Similarly, Tata Steel and SAIL are pursuing expansion plans targeting capacities of 40 million tons and 35 million tons, respectively. Collectively, ISPs are looking to add an additional 85 million tons of capacity by the end of the decade, bringing total ISP capacity to an impressive 213 million tons.

“The projected capacity growth, when combined with the anticipated expansion in secondary steel production, will ensure that India surpasses its 300 million tons target by 2030,” Poundrik stated. This optimistic outlook reflects the country’s rapidly growing demand for steel, particularly in the housing, infrastructure, and engineering sectors, where steel-intensive projects are becoming increasingly common. However, this robust growth in capacity is not without its challenges. Poundrik acknowledged that the current pricing environment, especially in the flat product segment, poses significant challenges for the industry. Imports and global market fluctuations have led to price pressures on domestic steel, especially flat products, which are predominantly manufactured by ISPs. If these pricing conditions persist, there could be delays in the execution of some of the planned projects, particularly those in the early stages of development.

To address these challenges, the Indian government is exploring fiscal measures to support the domestic steel industry. Among the options being considered is an increase in the Basic Customs Duty (BCD) on steel imports, which currently stands at 7.5 percent. However, due to existing Free Trade Agreements (FTAs) that exempt many steel imports from this duty, its effectiveness may be limited. Additionally, the Directorate General of Trade Remedies (DGTR) is examining proposals to impose safeguard duties on imported steel, with recommendations expected by February. Poundrik also highlighted the government’s proactive stance in combating steel dumping practices, particularly those involving cheap imports from countries like China. Although he refrained from labelling these exports as dumping, he noted that they were largely driven by subdued global demand rather than deliberate undercutting. China, with its massive steel production capacity of around 1,100 million tons, has faced declining domestic demand, prompting it to increase exports, which has affected international steel prices, including in India.

The steel sector’s importance to India’s economic aspirations cannot be overstated. From a production capacity of 137 million tons in 2018-19, the industry has surged to 196 million tons in 2023-24, marking a growth of nearly 59 million tons. This expansion is crucial for India’s ambitions of becoming a $5 trillion economy, with the steel industry serving as a cornerstone of both infrastructure development and broader economic growth. On the global front, India remains the only major economy to experience consistent annual growth in steel demand, with over 10 percent growth year-on-year. This stands in contrast to developed economies like the United States and Europe, where steel demand has stagnated. Meanwhile, China’s oversupply situation has put downward pressure on international steel prices, impacting the Indian market, where hot-rolled coil (HRC) prices have dropped by over ₹6,000 per ton in the past year.

Further complicating matters are state-level taxation policies. In Karnataka, for example, a new tax on public sector companies like NMDC, which has already increased iron ore production, has led to concerns. NMDC now faces a tax burden equivalent to 150 perceof royalties, which could affect its profitability and its plans for capacity expansion, including its steel plant in Nagarnar, Chhattisgarh, which is currently slated for disinvestment. Despite these hurdles, the steel sector remains a key driver of India’s economic growth. Poundrik expressed confidence in the industry’s ability to meet its targets, provided the government and stakeholders work together to safeguard the sector’s interests. India’s position as a global steel producer continues to solidify, reinforcing the country’s critical role in the international steel market.