India’s Steel Industry Journey From Ancient Roots To Future Horizons 

India’s metalworking tradition, rooted in 1600 BCE, laid the foundation for a transformative industry. The late 19th century ushered in change with industry pioneers like TISCO (Tata Iron and Steel Company), shaping India’s steel market scenario since 1907. Post independence, the sector experienced growth witnessing giants like HSL and SAIL, solidifying India’s position as the world’s 2nd largest steel producer. The historical journey spans over 4,000 years, culminating in the steel mills’ establishment in Bhilai, Durgapur, and Rourkela in the 1950s. Bokaro plants’ establishment in 1964 and SAIL’s rise in 1973 reflected India’s commitment to development.

Let’s embark upon a historical voyage, exploring innovation and the global impact of India’s steel industry.

Growth Trajectory

Over the last decade, India’s steel sector has witnessed impressive growth, marking a 75% surge in production since the economic loom in 2008, paralleled by an 80% rise in domestic steel demand. As the demand grows, the same growth can be seen in the steel rate today as they are on the higher side.

The estimated development of the steel sector through 2030 and beyond is consistent with the National Steel Policy 2017. The policy outlines a roadmap for the steel sector, projecting a steel making capacity of 300 million tons per annum, crude steel production of 255 million tons, and finished steel production of 230 million tons by 2030–31.

The sector is estimated to achieve this target at a compound annual growth rate of about 7.2 %, given the 11.8% growth recorded in FY 2023–24. The policy growth trajectory is remarkably similar to the historical performance of this sector.

Sector wise Demand Drivers

India’s maximum steel demand is from the following sectors:

1. Construction (62%): The construction industry is expected to increase by 7% by 2024, as a key component of steel demand impacting the steel rate today. The steel demand is expected to grow by 50% due to infrastructure projects like Bharatmala, Sagarmala and Smart Cities and construction investment.

2. Railways (3%): Steel consumption growth, driven in part by electrification projects and freight line extensions, comes from the railways. Steel usage has been widespread on the track, structure, and support systems for electrification initiatives. Steel demand continues to grow and requires a large supply of railway lines, bridges and infrastructure due to the development of specialized freight corridors.

3. Automobiles (9%): India’s auto industry, with 4th place on the global list, is likely to maintain its high steel consumption. Increasing exports of cars and auto parts are intended to increase steel requirements. It also contributes to the strong steel demand in the automotive sector by promoting continued growth and aligning with world standards, through specific initiatives such as the 2016–2026 Automotive Mission Plan.

Technological Advancements

Let’s have a look at the tech innovations that drive steel industry progress, address production gaps and unlock sectoral potential:

  1. Hydrogen Injection At Tata Steel: The experiment of injecting hydrogen gas in the ‘E’ Blast Furnace at Jamshedpur Works by TATA Steel is a progressive move towards sustained steel production. This initiative, which injects a significant amount of hydrogen gas every day in the blast furnace using 40% of injection systems, has never been carried out worldwide. This initiative promotes hydrogen as a possible alternative to traditional fuels, reducing CO2 emissions.

2. Global Collaborations And R&D Initiatives: The directive of the Ministry of Steel that gives priority to R&D projects totalling at least one per cent of sales demonstrates their dedication to technological development. International cooperation has opened doors for knowledge sharing and collaborative initiatives such as signing a Memorandum of Understanding with Japan (Ministry of Economy, Trade, and Industry).

3. Digital Disruption For Operational Excellence: For efficiency, the steel industry is integrating technology such as predictive analytical techniques, Internet of Things Analytics, IoT and data lakes into its digital transformation. As part of its transition, this initiative should result in significant time savings, enhanced service levels and significant increases in earnings before interest, taxes, depreciation and amortisation (EBITDA).

4. Industry 4.0 And Smart Manufacturing: Embracing Industry 4.0 principles, the steel sector has been evolving into a smart manufacturing hub. This transformation incorporates Internet of Things enabled equipment condition monitoring and utilizing AI for predictive maintenance. The collaborative efforts of robots and drones are enhancing safety, effectiveness, and efficiency across various operations in the industry.

5. 3D Printing: In the steel industry, 3D printing has ushered in an era of design flexibility and on demand production. This not only enriches design possibilities but also streamlines supply chains by enabling the production of parts as needed. Leveraging additive processes for crafting intricate steel structures enhances production efficiency.

6. Focus On Energy Efficiency: To achieve sustainability goals, the sector is investing in energy efficiency projects. The Ministry’s commitment to minimizing environmental impacts and bolstering overall competitiveness is evident through its Task Force and the incorporation of energy efficient technologies.


In its growth journey, India’s steel industry faces hurdles despite global recognition for cost effective iron to steel conversion:

  1. Finance: The industry requires a capital of around Rs.7,000 crore per ton, coupled with significant financial challenges due to a 30% 35% rise in production costs. The steel rate today is directly influenced by these challenges. The situation is further complicated by diminished returns, leading to a cautious approach from financial institutions in extending lending support.

2. Logistics: At times, managing the mass transport of raw materials is an extraordinary challenge. The location of inland stations, compared to coastal ones exacerbates the logistical problems. The challenge facing the dependence on rail transport, a key mode of transport, is infrastructure constraints that lead to higher operating costs.

3. Tax And Duties/Cess: The sector faces an extra charge of USD 35-40 per ton attributable to non-creditable taxes, duties, and cesses. Despite alterations in corporate tax rates, global competitiveness continues to pose a challenge, hindering the industry’s potential to expand.

4. Steel Scrap: Given the looming threat of a scrap metal export ban from the European Union, India’s ambitious plan to double its steel production capacity to 300 million tons has been jeopardized. Policy changes that could result in a tightening of supply to India and affect scrap metal prices are currently being considered by the EU as part of its efforts to reduce industrial emissions.

Road Ahead 

As India positions itself as a manufacturing powerhouse, the steel industry takes centre stage. Contributing 2% to India’s GDP, it stands as the world’s largest steel manufacturer, gearing up to be the second largest consumer. A strategic approach is imperative for advancing India’s trade balance in steel and enhancing export capabilities.