India’s Steel Sector Advances Towards Self-Reliance: Key Takeaways

India’s steel sector is getting more self-reliant — and greener

India’s steel industry is quietly having a strong decade: the country has remained the world’s no. 2 steel producer since 2018, while domestic consumption has more than doubled over the last 12 years. Alongside scale, the bigger story is depth—India is building stronger capabilities across the steel value chain, improving trade performance, and laying the groundwork for low‑carbon (“green steel”) production.

Source: Press Information Bureau (Government of India), “India’s Steel Sector Advances Towards Self-Reliance” (05 May 2026).

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2258028&reg=48&lang=2

Snapshot

A bigger, faster-growing steel economy

Steel remains one of India’s most important “real economy” sectors because it sits under infrastructure, manufacturing, and mobility.

The PIB backgrounder notes that India is also the 2nd largest consumer of finished steel globally. The consumption rise to 163.7 MT in FY 2025–26 reflects:

• sustained infrastructure build-out,
• urbanisation and housing needs,
• manufacturing growth and capex,
• expanding domestic demand across downstream industries.

Production strength across categories (not just crude steel)

While “crude steel” gets the headlines, the press release underlines the broad-based momentum across production categories:

• Crude steel climbed to 168.4 MT in FY 2025–26, with ~9% CAGR between FY 2021–22 and FY 2025–26.

• Hot metal, pig iron, and sponge iron also grew (Apr–Sep FY 2025–26 vs prior year), indicating strengthening fundamentals across core inputs.

• Finished steel production reached 160.9 MT, while consumption remained strong—suggesting industry output is tracking real end-use demand.

This matters for self-reliance: deepening capabilities across the chain reduces vulnerability to supply shocks and improves the ability to serve domestic and export markets.

Trade is turning more favourable

A key self-reliance signal is the trade shift:

• Steel exports rose, including a 29.1% YoY jump in March 2026 (as cited by PIB).
• Imports declined (e.g., -9.5% YoY in March 2026).
• For FY 2025–26, PIB notes finished steel exports up 35.8% while imports fell 46.47% (vs the same period last year).

PIB also points out that Vietnam, Belgium, and Taiwan were the top destinations for finished steel exports in March 2026, together accounting for over half of India’s finished steel exports.

Policy levers: specialty steel, procurement preference, and quality standards

The backgrounder frames steel as a de-regulated sector, with government acting as a facilitator—primarily through policy and incentives.

Production Linked Incentive (PLI) for Specialty Steel

Specialty steel—high-value grades used in strategic and industrial applications—is a major focus area.

PIB cites achievements under the scheme, including:

• ₹23,022 crore investment realised,
• 2.4 million tonnes specialty steel production,
• 13,264 direct jobs created,
• 24 million tonnes specialty steel capacity created,
• ₹6,000 crore import substitution.

A newer PLI 1.2 round (announced Nov 2025) targets advanced products with incentives ranging 4% to 15% over five years, and MOUs for 85 projects across 55 companies.

Strengthening domestic procurement and supply

Other measures highlighted include:

• Domestically Manufactured Iron & Steel Products (DMI&SP) policy (revised May 2025) to preference domestically made steel in government procurement.
• The “melt and pour” rule, pushing end-to-end domestic manufacturing for qualifying steel.
• Quality Control Orders (QCOs) to ensure BIS-compliant steel and restrict sub-standard imports.

Logistics and infrastructure: enabling the next phase of growth

Steel is logistics-intensive, so the government emphasis on steel zones and multimodal connectivity is strategically important.

PIB notes efforts including:

• fast-tracking rail/road/port upgrades across 12 major steel zones,

Major steel zones are located in Kalinganagar, Angul, Rourkela, Jharsuguda, Nagarnar, Bhilai, Raipur, Jamshedpur, Bokaro, Durgapur, Kolkata and Vizag.

• mapping 2,100+ steel units onto the PM GatiShakti platform to support data-driven logistics planning.

The next frontier: decarbonisation and “green steel”

Even as scale rises, the steel sector must reduce emissions. PIB’s note lays out a phased approach:

• Short term (to FY 2030): energy/resource efficiency and more renewables.
• Medium term (2030–2047): green hydrogen-based steelmaking and CCUS (carbon capture, utilisation and storage).
• Long term (2047–2070): disruptive technologies to reach net-zero.

Two notable developments:

• India introduced an official Green Steel Taxonomy (2024).
• As of 31 March 2026, 89 steel units have been awarded green steel certification, covering 12.34 MT of production volume (as cited in the PIB note).

Bottom line

India’s steel story is shifting from “more tonnes” to “more capability”: stronger domestic production, improving trade performance, and targeted policies (especially in specialty steel) are pushing the sector toward greater self-reliance. At the same time, the direction of travel is clear—scale must be paired with sustainability, with green hydrogen, CCUS, scrap utilisation, and renewable energy becoming central to the next chapter.