Written by: Shishir Gupta, Rishita Sachdeva
5 min readNew DelhiJul 1, 2026 09:23 AM IST
First published on: Jun 30, 2026 at 05:49 PM IST
Over the last two decades, India’s steel production has expanded rapidly. From producing less than 1% of global steel output and ranking ninth in 2000, India has become the world’s second-largest producer, accounting for nearly 9 % of global steel output by 2023, behind only China, which produces about half the global steel output.
India’s crude steel production expanded from 28 million tonnes in FY’02 to 152 million tonnes in FY’25. This is a result of robust domestic steel consumption, growing at an annual rate of 7.6% between 2002 and 2025. India is a growing and developing country in the midst of urbanisation. With large-scale urban infrastructure projects underway, it has and will continue to have a strong steel demand.
Are we self-sufficient in steel?
Although India produces enough steel to meet its overall volume requirements, it imports speciality steel. India primarily produces basic steel for infrastructure, but evolving demands in the automotive and construction sectors require speciality steel with niche properties. To meet this need, industries are importing premium steel from Japan and South Korea. Moving forward, India must scale up its domestic production of speciality steel to correct this trade imbalance.
Who are the major steel producers in India?
The steel industry’s growth is led by large domestic private steel manufacturers. The top five firms by market share account for 40-45 % of domestic output since 2000.
These are Tata Steel, JSW Steel, SAIL, Jindal Steel & Power and Arcelormittal Nippon Steel India. As of 2024, Tata and JSW account for around 12% of total market sales each, followed by SAIL at 9%. JSW Steel’s market share rose from 1% in 2000 to 11.6% in 2024, while the share of SAIL, the historically dominant public-sector manufacturer, declined from 29% to 9%.
All five steel producers have captive mining operations of iron ore of varying degrees, meaning they own iron ore mines, a key ingredient for steel manufacturing. Given the 40-50% mark-up in the cost of iron ore to a miner versus its price in the market, captive mining provides a significant cost advantage to steel manufacturers.
What have been the major policy changes in steel?
The steel industry has gone through two distinct policy phases. The early 1990s saw delicensing and liberalisation of the sector, with automatic approval of foreign equity investment upto 51% in steel. Between 1990 and 2007, import tariffs were cut from 93% to 7%, following which the protection and benefits to the sector started to increase.
In 2007, the Indian government imposed the export duty on iron ore, the core raw material for steel, initially at 15% and increasing to 30%. The aim was to discourage exports and ensure an ample supply for the domestic steel industry. In 2017, the government mandated the use of only domestically manufactured steel for government projects, restricting competition from global players. Currently, quality control orders are applicable to 556 eight-digit HS codes of steel. In 2025, an additional 12% duty was applied on non-alloy and alloy steel flat products, over and above the existing 7% tariff, which is set to reduce by 0.5% every year in the subsequent three years.
What are the latest government programmes to promote steel manufacturing?
In 2021, the government launched a product-linked incentives (PLI) scheme for speciality steel to boost domestic production and reduce import dependence. Under this, the government provides financial incentives for production, technology upgradation and capacity expansion.
In 2024, the Ministry of Steel launched a roadmap for greening the steel sector as a long-term pathway for decarbonisation in line with India’s net-zero 2070 target. They have allocated ₹455 crore for pilot projects till 2029-30. Interestingly, in 2025, Niti Aayog proposed reforms to ease imports in the steel sector by the downstream industry, which suggested the removal of QCOs on 100 steel products. By April 2026, QCOs for approximately 50 steel products have been suspended by the Ministry of Steel.
How will CBAM affect India’s steel sector?
The European Union’s Carbon Border Adjustment Mechanism (EU-CBAM) is a climate policy tool aimed at reducing carbon leakage by imposing carbon tariffs on imports from non-EU countries with lower environmental regulations.
Although India’s CBAM-exposed exports to the EU account for only 0.2% of India’s GDP, the iron and steel sector constitutes 90% of these exports, making it particularly vulnerable.
Shishir Gupta is Senior Fellow and Rishita Sachdeva is Associate Fellow, Centre for Social and Economic Progress. Views are personal.
India primarily produces basic steel for infrastructure, but evolving demands in the automotive and construction sectors require speciality steel with niche properties. (Magnific) 
Share
