India's steel consumption climbed to 149 million tonnes (mnt) in FY25 and is projected to reach 192 mnt by 2030, expanding at a compound annual growth rate of 6-7 per cent, according to a new report by the Multi Commodity Exchange of India Limited (MCX). The findings, released during the Global Commodity Conclave in Mumbai, signal that the next chapter of India's steel story will be defined as much by quality and sustainability as by sheer volume.

Infrastructure as the Core Driver

Construction and infrastructure currently account for 59 per cent of India's steel consumption and are expected to contribute 60-63 per cent of total demand by 2030. The MCX report estimates that the country's infrastructure pipeline alone could unlock an additional 25-30 mnt of steel demand as logistics bottlenecks, financing constraints, and execution challenges ease over the coming years.

The Shift Toward Higher-Value Steel

Beyond raw tonnage, the report identifies a structural gap in India's steel production mix. India continues to import advanced and application-specific grades even as its exports remain concentrated in lower-margin products. The specialty steel Production-Linked Incentive (PLI) scheme is helping address this imbalance, with PLI 1.0-1.2 representing more than ₹55,000 crore in committed investment, according to the report's findings.

Indian mills are increasingly targeting sectors such as renewables, electric vehicles (EVs), and capital goods — areas where fit-for-purpose, higher-value output commands better margins. As the report noted, 'The product story is no longer about tonnes, it is about fit-for-purpose output.'

The Carbon Challenge

India's steel growth ambitions come with a significant emissions burden. The MCX report puts the sector's emissions intensity at 2.55 tonnes of carbon dioxide per tonne of crude steel — well above roughly 1.4 tonnes in the US and about 1.9 tonnes in the EU. This gap underscores the scale of decarbonisation work ahead.

The share of blast furnace-based production — the more carbon-intensive route — is projected to rise from 42 per cent to 56 per cent by 2030. The report highlights renewable energy adoption, improved energy efficiency, greater scrap utilisation, green hydrogen, and carbon capture as the primary levers being pursued to reduce the sector's carbon footprint.

What the Industry Needs to Do Next

The MCX report argues that India's steel growth will need to be matched by deliberate efforts to lower production carbon intensity and manage price risks more effectively. With global buyers increasingly applying carbon-linked trade measures, Indian producers that lag on decarbonisation risk losing market access even as domestic demand surges. The coming five years will test whether India can scale steel output and clean it up at the same time.