India’s steel industry is navigating a period of heightened uncertainty, shaped by global protectionism, trade disruptions, and a surge in cheap imports. The re-imposition of tariffs by the US and the EU’s Carbon Border Adjustment Mechanism have raised new barriers for Indian exports, while domestic producers continue to battle low-cost dumping from Asian markets. Yet, amidst these challenges, India’s steel sector remains resilient, backed by strong policy support and long-term growth potential
The steel industry is back in the spotlight - this time triggered by global political developments. Following his re-election, President Donald Trump of the United States has reignited his agenda of restoring what he terms “American supremacy.” As part of this broader strategy, his administration has moved swiftly to introduce a new wave of protectionist trade policies. One of the most significant steps has been the imposition of reciprocal tariffs on a range of imported goods, including steel and aluminum.
For India, this development is more than just a diplomatic concern - it’s an economic one. Indian steel manufacturers, who have been ramping up production and exports to cater to global demand, now face a considerable challenge in retaining their competitive edge in the U.S. market. This move could not only impact export volumes but also prompt a shift in trade routes, pricing strategies, and production planning. In an interconnected global economy, such unilateral decisions have ripple effects, and India’s steel sector is bracing for the turbulence ahead.
Another pressing issue confronting the Indian steel sector is the dumping of cheap steel by countries such as China, South Korea, Japan, Vietnam, and Thailand. This influx of low-priced imports has significantly eroded the profitability of Indian steel manufacturers, prompting repeated appeals to the Indian government for intervention. In response, the government is actively considering anti-dumping duties on select steel products originating from these countries. A recent investigation conducted by the Directorate General of Trade Remedies (DGTR) revealed that the imports in question were indeed undercutting domestic prices and harming local producers. As a result, the DGTR has recommended the imposition of provisional safeguard duties to provide relief to the domestic steel industry. While these duties are aimed at protecting Indian manufacturers, the DGTR has also acknowledged the potential adverse impact on downstream industries, which rely heavily on steel as a key raw material. Steel is a vital input for sectors such as infrastructure, automotive, engineering, and capital goods. Any increase in the cost of imported steel could ripple across the supply chain, potentially raising the prices of end products. However, the DGTR concluded that the need to shield domestic producers from unfair competition currently outweighs the risk of short-term inflationary pressures. It’s worth noting that India continues to depend on steel imports to meet certain specialized requirements that cannot be fulfilled by domestic producers due to limitations in technology and product quality.
Fuelling a $5 trillion economy
The steel industry is a cornerstone of India’s economic development, playing a pivotal role in driving the nation's growth ambitions. It contributes approximately 2 percent to the national GDP and provides employment to nearly 600,000 people directly and another 2 million people indirectly through ancillary industries such as mining, logistics, equipment manufacturing, and services. As a fundamental raw material for infrastructure and industrial projects, steel serves as both an indicator and enabler of economic progress. The strength of a country’s infrastructure is directly linked to the performance of its steel sector, and in India’s case, this linkage is becoming even more critical as the country sets its sights on becoming a USD 5 trillion economy by 2025. From transport networks to utilities and real estate, steel is indispensable to infrastructure. It underpins bridges, tunnels, railways, metros, airports, power plants, pipelines, and buildings—making it a vital enabler of India’s urbanization and industrial growth. India's standing in the global steel landscape is equally noteworthy. According to IBEF, India is the world’s second-largest producer of crude steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY23. In April-December 2024, crude steel production in India stood at 110.99 MT and finished steel production stood at 106.86 MT. In FY25 (April-December), the consumption of finished steel stood at 111.25 MT. In April-December 2024 exports of finished steel stood at 3.60 metric tonnes (MT), while imports stood at 7.28 MT. In recent years, this position has been strengthened through increased capacity additions, modernization of plants, and a rising domestic demand curve fuelled by mega infrastructure projects, government housing schemes, and a resurgent automotive sector.
Q3FY25: Earnings and edges
JSW Steel reported a sharp 70.3 percent year-on-year (YoY) decline in consolidated net profit to Rs.717 crore for the Q3FY25, primarily due to weaker steel prices. In the same quarter last year, the company had posted a profit of Rs.2,415 crore. Sequentially, profit also dropped from Rs.439 crore in Q2FY25. Consolidated revenue stood at Rs.41,378 crore, down 1.3 percent from Rs. 41,940 crore in the year-ago period. Tata Steel’s India production volume for Q4FY25 stood at 5.51 million tonnes, showing a marginal increase from 5.40 million tonnes in Q4FY24. However, on a sequential basis, output declined from 5.69 million tonnes recorded in Q3FY25. In its overseas operations, production at the Netherlands facility rose year-on-year to 1.63 million tonnes from 1.48 million tonnes, but dropped quarter-on-quarter from 1.76 million tonnes. Output from the UK plant was nil, following the shutdown of two blast furnaces at the Port Talbot steelworks in South Wales. Production at the Thailand plant remained steady at 0.31 million tonnes year-on-year and showed a modest increase from 0.26 million tonnes in the previous quarter. On the deliveries front, Tata Steel India recorded volumes of 5.6 million tonnes in Q4FY25, up from 5.42 million tonnes in Q4FY24 and 5.29 million tonnes in Q3FY25.
Steel Authority of India (SAIL) reported a 62.04 percent year-on-year decline in standalone net profit, which fell to Rs.125.80 crore in Q3FY25 from Rs.331.40 crore in Q3FY24. Despite the profit slump, revenue from operations rose 4.9 percent year-on-year to Rs.24,489.63 crore for the quarter ended December 31, 2024. Profit before exceptional items and tax stood at Rs.289.50 crore, marking a 24.67 percent drop from Rs.384.29 crore in the same quarter last year. The company recorded an exceptional gain of Rs.28.53 crore in Q3FY24. Total expenses increased by 6.16 percent YoY to Rs.24,564.44 crore. However, the cost of materials consumed declined by 14.23 percent, amounting to Rs.11,785.47 crore. EBITDA stood at Rs.2,389 crore in Q3 FY25, registering a modest growth of 3.02 percent compared to Rs.2,319 crore in Q3 FY24. Sales volume rose to 4.43 million metric tonnes (MT), up from 3.81 MT a year earlier. Crude steel production, however, declined slightly to 4.63 MT in Q3 FY25 from 4.75 MT in the corresponding period of the previous fiscal. Jindal Steel and Power (JSPL) reported a 51 percent year-on-year decline in consolidated net profit, which stood at approximately Rs.951 crore for Q3FY25, despite modest growth in revenue and increased production and sales volumes during the quarter. The company’s consolidated revenue rose slightly to Rs.11,751 crore, while adjusted EBITDA fell nearly 24 percent year-on-year to Rs.2,133 crore. Net debt rose to Rs.13,551 crore, compared to Rs.12,464 crore in the previous quarter. Steel production during the quarter stood at 1.99 million tonnes, marking a 2.5 percent increase year-on-year. Sales volume rose 5 percent to 1.90 million tonnes. Exports accounted for 7 percent of the company’s total sales for the quarter.
Navigating the headwinds
The steel industry - both globally and in India - is grappling with a mix of economic, logistical, and environmental challenges that are reshaping its landscape. At the forefront is the rise in protectionist policies across the world. The imposition of reciprocal tariffs by countries like the United States and mechanisms such as the EU's Carbon Border Adjustment Mechanism (CBAM) have disrupted traditional trade dynamics and added compliance costs for exporters. Indian steelmakers, who have been key players in global markets, are now forced to navigate shifting regulations and reduced competitiveness. Simultaneously, the problem of steel dumping from countries like China, Vietnam, and South Korea persists. Excess steel production in these nations, often sold at below-market prices, continues to erode margins for Indian producers. While India’s Directorate General of Trade Remedies (DGTR) has initiated anti-dumping investigations and recommended provisional duties on some products, the issue remains a significant concern for domestic manufacturers.
Coal dependency presents another major hurdle. India imports large volumes of coking coal - primarily from Australia - making its steel production costs vulnerable to global market volatility. Rising coal prices, supply chain disruptions, and logistical delays have added to the cost burden. At the same time, the industry is under mounting pressure to decarbonize. Transitioning to green steel through technologies like hydrogen-based direct reduced iron (DRI) or electric arc furnaces (EAF) is capital-intensive and not yet widely viable, especially for mid-sized players.
The global supply chain remains fragile due to lingering effects of the pandemic, the Russia-Ukraine conflict, and tensions in the Red Sea. These factors have driven up freight charges, delayed shipments, and caused shortages of critical inputs like iron ore, scrap, and ferroalloys. Domestic logistics also face bottlenecks, including high rail freight rates, limited port capacity, and inadequate last-mile connectivity - all of which inflate distribution costs. Rising input costs - covering everything from electrodes to alloys - continue to pressure margins. On top of that, environmental regulations and net-zero commitments have increased the need for sustainable practices, pushing steelmakers to invest heavily in emissions control and cleaner technologies. However, access to affordable long-term capital for these upgrades remains a challenge.
The industry also faces a shortage of skilled labour for operating advanced technologies, coupled with delays in land acquisition and environmental clearances that hinder expansion projects. Lastly, global economic slowdown and weak demand from key consuming sectors such as real estate and automobiles have led to softening steel prices, impacting revenue and profitability. Together, these challenges underline the need for robust policy support, faster infrastructure upgrades, and accelerated innovation to ensure the long-term competitiveness of the Indian steel sector.
Driving the growth
India’s steel sector is experiencing robust growth, fuelled by a diverse set of demand drivers that span across core infrastructure, emerging industries, and national development programs. One of the most significant catalysts is the infrastructure boom, led by massive government-backed initiatives such as Bharatmala, Sagarmala, the Smart Cities Mission, and PM Gati Shakti. These ambitious programs are generating large-scale demand for structural steel, rebars, and long products used in highways, ports, urban transit, and integrated logistics networks. Simultaneously, rapid urbanization and the push for affordable housing under schemes like Pradhan Mantri Awas Yojana (PMAY) are accelerating the consumption of steel in the real estate and construction sectors. With India’s urban population expected to cross 600 million by 2030, the need for housing, commercial spaces, and supporting infrastructure will continue to drive long-term steel demand.
The automotive and manufacturing sectors are also playing a transformative role. As India positions itself as a global manufacturing hub, particularly in the automotive domain, there is a growing need for high-strength flat steel and specialty alloys. The Production Linked Incentive (PLI) schemes for automobiles, white goods, and electronic components are set to further boost the usage of advanced steels. The transition towards renewable energy and electric vehicles (EVs) is creating new opportunities for steel usage. Steel is a key component in wind turbine towers, solar panel mounting structures, battery enclosures, and EV chassis, opening up avenues for innovative applications and customized steel grades. Moreover, strategic sectors such as defense and railways are emerging as high-potential growth areas. The government’s thrust on indigenization in defense manufacturing and large-scale railway modernization and electrification plans are expected to significantly increase domestic steel consumption. Together, these sectors form a powerful engine of growth for the Indian steel industry, ensuring strong and sustained demand in the years ahead.
Forging ahead
While protectionist measures, dumping threats, volatile coal prices, and logistical challenges present formidable obstacles, the sector’s long-term fundamentals remain strong. Backed by robust government infrastructure spending, rising urbanization, and the rapid expansion of sectors like automobiles, defense, and renewable energy, India’s steel demand is poised for steady growth.
