New Delhi [India], February 17 : India's crude steel capacity must grow at a compounded annual growth rate of 8 per cent to meet the government steel target of 300 million metric tonnes (mn MT) by 2030, according to a report by HDFC Securities.
The report highlighted that at the end of the financial year 2023-24 (FY24), India's crude steel capacity stood at 180 mn MT, reflecting an 11 per cent year-on-year (YoY) increase.
It said, "The Indian crude steel capacity was 180mn MT at FY24-end, up 11 per cent YoY. Ministry of Steel targets to increase it to 300mn MT by 2030 and 500mn MT by 2047. To achieve this target, 8 per cent capacity CAGR will be required by 2030".
The report highlighted that crude steel production in India grew at a CAGR of 5 per cent between FY19 and FY24. In FY24 alone, production surged 13 per cent YoY to 144 mn MT, leading to an overall capacity utilization of 80 per cent. The private sector played a dominant role in production, contributing 83 per cent of the total output.
However, India's crude steel production growth slowed to 4 per cent YoY in the April-November 2024 period, mainly due to a rise in steel imports. In FY24, total finished steel imports stood at 8.3 mn MT, marking a sharp 38 per cent YoY increase.
The domestic steel industry is demanding a safeguard duty on imported steel to prevent the dumping of cheap steel from China in India.
The bulk of these imports came from South Korea, China, Japan, and Vietnam, which together accounted for over 80 per cent of India's steel imports.
On the consumption front, the report noted that India's steel demand has been growing steadily. Over the past five years, domestic steel consumption expanded at a 7 per cent CAGR, far outpacing the global average of just 1 per cent.
In FY24, India's steel consumption surged 14 per cent YoY to 136 mn MT, and demand has remained strong in FY25 as well. In the first nine months of FY25 (April-December 2024), steel consumption rose 11 per cent YoY.
The report highlighted the need for consistent capacity expansion to meet the rising domestic demand while also addressing the challenges posed by increasing imports.
With a strong growth trajectory, India's steel industry remains a key pillar of the country's infrastructure and manufacturing sectors.
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