Is India's Steel Production Growth Rate Surpassing China's?

Mumbai, June 26 (NationPress) The steel sector in India is making impressive strides towards achieving the government's ambitious goal of reaching 300 million tonnes per annum (MTPA) in crude steel capacity by FY2030-31, as per a recently published report from the private sector.

This report reveals that India's steel production growth rate has surpassed that of both China and the global average. From 2016 to 2024, India showcased a CAGR of approximately 5 percent, in contrast to 2.76 percent for China and 1.77 percent globally.

Importantly, while China's steel output has been on a downward trend since 2020, India experienced a remarkable CAGR of 8 percent during this time. This significant contrast highlights India's growing significance in the worldwide steel landscape, bolstered by an abundance of raw materials, affordable labor, and supportive government policies, according to the report.

As of FY2024-25, India has achieved an installed capacity of 205 MTPA, with major steel producers planning to expand capacity by 167 MTPA by 2031. However, the industry faces challenges such as the need for iron ore beneficiation, a heavy reliance on imported coking coal at 85 percent, limited steel scrap availability, and high carbon dioxide emissions in the steel production process, as noted by MP Financial Advisory Services LLP (MPFASL).

The report indicates that India's steel consumption, which stands at 93.4 kg per capita compared to the global average of around 219 kg, is projected to rise significantly due to increased investments in infrastructure, affordable housing, and manufacturing. Closing this consumption gap will require a considerable scale-up in steel-making capacity, emphasizing the importance of reaching the 300 million ton crude steel capacity goal.

While challenges exist, the report suggests that achieving the 300 MTPA target by 2030-31 will require a multi-faceted strategy focused on five crucial areas: enhancing investments in green and value-added steel, improving infrastructure and raw material linkages, adopting clean technologies, reforming policies regarding financing and approvals, and establishing a robust public-private execution model.

Fueled by rapid industrialization and infrastructure-driven growth, India's steel production has surged in recent years, positioning the nation as the second-largest steel producer globally, trailing only China, which accounts for over 50 percent of the world's output.

As the world's second-largest steel producer, India is spearheading this transformation amidst high infrastructure demand, supportive policies, and shifts in global supply chains, the report concluded.