India's steel industry bucks global slowdown as demand and output rise: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Monday urged domestic steel producers to reduce carbon emissions and increase the production of specialty and high-grade steel to lower India's dependence on imports, PTI reported.

India's steel demand offers room for growth

Sitharaman said India was following a different trajectory from much of the global steel industry, which is dealing with excess capacity and weak demand. Domestic consumption and sustained investment have supported India's steel market, she added.

"For two successive years, consumption has exceeded production, underscoring the strength of the domestic market and the potential for further growth remains substantial," the finance minister said.

At approximately 109 kg per person, India's steel consumption remains well below the global average of 209 kg, indicating significant scope for demand to increase, she said.

Public investment drives steel demand

Sitharaman attributed the growth in steel demand to the government's sustained public capital investment programme. The Union government's capital expenditure has risen sixfold, from approximately ₹2 lakh crore in 2014-15 to ₹12.2 lakh crore in FY27, the PTI report mentioned further.

Construction and infrastructure account for about two-thirds of India's steel consumption. Higher public investment in these sectors directly supports demand for the metal, she said.

According to Sitharaman, public investment provides steelmakers with a sustained domestic market and greater confidence to invest in additional capacity and modernisation.

Focus on specialty steel and decarbonisation

Sitharaman outlined five priorities for the steel industry, including lowering the energy and carbon intensity of production while expanding capacity to meet India's development requirements.

She said increasing domestic production of specialty and high-grade steel would support strategic industries and reduce reliance on specialised imports.

The minister also called for decarbonisation at a pace consistent with India's development priorities. This would require credible emissions measurement, technological development and a fair sharing of the costs of the transition, she said.

Sitharaman calls for multilateral action on excess capacity

On global trade, Sitharaman cautioned that successive unilateral tariffs merely redirect surplus steel from one market to another rather than addressing the underlying problem.

A lasting solution to global excess capacity requires multilateral disciplines on subsidies that sustain uneconomic production, supported by transparent data, she said.

She also told members of the World Steel Association that India offered the world's fastest-growing major steel market, supported by public investment and an existing green steel framework.

FM urges association to set up India office

Sitharaman urged the World Steel Association to consider establishing an office in India, citing the country's emergence as the largest single source of growth in global steel demand.

She noted that the association had opened its Beijing office in 2006, when China was driving much of the growth in steel demand. A stronger presence in India would bring the organisation closer to a major market for incremental demand, technological development and industrial expansion, she said.

An India office could also help the association deepen its engagement with fast-growing steel markets across South Asia, Southeast Asia, West Asia and Africa, with which India has longstanding commercial ties, Sitharaman added.