Indian Steel Industry Shows Strong Growth Amid Emerging Challenges in 2025-26

1. At a Glance

• India is the world's second-largest crude steel producer, with FY 2025-26 output of ~168.4 MT, growing 10.7% YoY [1][2].
• Sector is anchored by the Ministry of Steel, the National Steel Policy (NSP) 2017 and the PLI Scheme for Specialty Steel [2][3].
• Steel is a core sector (8 core industries) and a strategic input for infrastructure, defence, auto and railways — central to UPSC GS-III (industry, infrastructure, manufacturing).

2. Why in the News

• PIB release dated 08 April 2026 by Ministry of Steel reported robust FY 2025-26 performance: record production, 7-8% consumption growth and surging exports [1].
• Government imposed a 12% safeguard duty in April 2025 on select non-alloy/alloy steel flat products to counter import surge, especially from China [4].
• PLI Scheme 1.1 launched (production window FY 2025-26 to FY 2029-30); PLI 1.2 (third round) opened for Specialty Steel [5].

3. Background & Evolution

• 1907: Tata Iron and Steel Company (TISCO) at Jamshedpur — first integrated steel plant.
• 1954: Hindustan Steel Ltd; 1973: SAIL formed as holding company under Ministry of Steel.
• 1991-92: De-licensing of iron & steel; opened to private sector and FDI (100% automatic route).
• 2017: National Steel Policy (NSP) 2017 — target 300 MTPA crude steel capacity by 2030-31; per-capita consumption target 160 kg [2].
• 2020: DMI&SP Policy (Domestically Manufactured Iron & Steel Products) for govt procurement.
• 2021: PLI Scheme for Specialty Steel approved (₹6,322 cr outlay); PLI 1.1 later launched for FY 2025-26 onwards [5].

4. Core Static Facts

• Implementing Ministry: Ministry of Steel (Union Minister: H.D. Kumaraswamy) [5].
• PSUs: SAIL, RINL (Vizag Steel), NMDC, MOIL, KIOCL, MSTC.
• NSP 2017 Targets: 300 MTPA capacity, 255 MT production, 158 MT finished steel consumption by 2030-31 [2].
• NSP 2017 Achievement: ~66% of 300 MTPA capacity target achieved by FY 2025-26 [2].
• PLI Specialty Steel Outlay: ₹6,322 crore; investment committed ₹43,874 crore; 30,760 direct jobs; 14.3 MT estimated production [2].
• FY 2025-26 Numbers:
• Crude steel: 168.4 MT (+10.7% YoY) [1][2].
• Finished steel consumption: 163.7-164 MT (+7-8%) [1][2].
• Finished steel exports: +35.80% YoY [2].

• Imports: -46.47% YoY [2].

• Safeguard Duty: 12% on select non-alloy/alloy flat steel products (Apr 2025, provisional) [4].

• Iron-ore reserves: India holds large hematite & magnetite reserves — Odisha, Jharkhand, Chhattisgarh, Karnataka are leading producers.

5. Multi-Dimensional Analysis

Economic

• Steel contributes ~2% of GDP; multiplier effect across construction (~60% demand), capital goods, auto.
• Import dependence on coking coal (>85% imported) remains structural vulnerability.
• Sharp drop in imports (-46.47%) + export surge (+35.8%) signals import substitution gains [2].

Strategic / Geopolitical

• Surge of cheap Chinese, Vietnamese, Korean steel triggered safeguard duty; CVD on welded stainless-steel pipes from China/Vietnam; ADD on seamless tubes (China), electro-galvanized (Korea/Japan/Singapore) [4].
• Critical input for defence indigenisation, railways, shipbuilding.

Environmental

• Steel sector accounts for ~12% of India's CO₂ emissions; Green Steel Mission / Taxonomy (2024) — defines green steel by CO₂ intensity (≤2.2 t CO₂/t steel for 5-star rating).
• Drive toward hydrogen-based DRI, scrap-based EAF, renewables in steel plants.

Administrative / Policy

• Mission Purvodaya — accelerated development of integrated steel hub in eastern India (Odisha, Jharkhand, Chhattisgarh, WB, north AP) leveraging iron-ore belt.
• DMI&SP Policy mandates domestic steel in govt procurement.

6. Recent Developments (last 12-18 months)

• April 2025: 12% provisional safeguard duty imposed on select flat steel imports [4].
• 2025: India Steel 2025 programme addressed by PM; sector termed "foundation of India's growth" [6].
• PLI Scheme 1.1 launched (production FY 2025-26 to FY 2029-30; incentive disbursal from FY 2026-27) [5].
• PLI 1.2 (third round) opened for Specialty Steel under Min. Kumaraswamy [5].
• March 2026: Exports +29.1% YoY; imports -9.5% YoY [4].
• April 2026 PIB release: 168.4 MT crude steel, world's 2nd largest producer status consolidated [1].

7. Prelims Hooks

• India is the 2nd largest crude steel producer globally (China 1st) [1].
• NSP 2017 target: 300 MTPA capacity, 158 kg per capita consumption by 2030-31 [2].
• PLI Specialty Steel outlay: ₹6,322 crore; 5 product categories, 3 sub-categories [5].
• Safeguard duty rate imposed April 2025: 12% on flat steel [4].
• FY 2025-26 crude steel: 168.4 MT, growth 10.7% [1].
• Finished steel consumption FY 2025-26: 163.7 MT vs 77 MT in 2014-15 [2].
• Steel sector falls under Ministry of Steel (not Ministry of Mines).
• SAIL established 1973; Maharatna PSU.
• Coking coal is the largest imported input for integrated steel plants.
• Mission Purvodaya focuses on eastern India steel hub.
• DMI&SP Policy = Domestically Manufactured Iron & Steel Products procurement policy (2017, revised).
• CVD on welded stainless-steel pipes/tubes from China & Vietnam [4].

8. Mains Relevance

• GS-III: Indian Economy — Infrastructure; Industrial Policy; Growth & Development.
• Possible question stems:
• "Examine the role of the National Steel Policy 2017 and PLI scheme in making India a global steel hub. What challenges remain?"
• "Cheap steel imports threaten India's domestic industry. Critically evaluate the trade-protection measures adopted in 2025-26."
• "Discuss the pathway to decarbonising India's steel sector in line with its 2070 net-zero commitment."

9. Related Topics to Study Next

• National Steel Policy 2017 — direct anchor policy.
• PLI Schemes (14 sectors) — comparative learning.
• Mission Purvodaya & Eastern India industrial corridor — regional dimension.
• Coking coal & critical minerals strategy — input-side vulnerability.
• Green Steel / Hydrogen Mission — decarbonisation linkage.
• Safeguard, ADD, CVD under WTO — trade remedy law.
• Core Sector / IIP — macro indicator linkage.
• Make in India & Aatmanirbhar Bharat — policy umbrella.

10. Common Errors / Trap Areas

• Confusing safeguard duty (against import surge, WTO Safeguards Agreement) with anti-dumping duty (against below-cost dumping).
• Wrongly attributing steel sector to Ministry of Mines — it is Ministry of Steel.
• Mixing up NSP 2017 targets (300 MTPA capacity by 2030-31) with finished-steel consumption targets.
• Assuming PLI Specialty Steel covers all steel — it covers 5 specified product categories (coated/plated, high-strength, specialty rails, alloy steel, electrical steel).
• Treating India as the world's largest producer — India is 2nd, after China.