India’s steel scrap demand set to surge as capacity expansion accelerates

India’s demand for steel scrap is expected to increase sharply in the coming years as the country accelerates capacity expansion in the steel sector, senior officials from the Ministry of Steel have said. With India targeting 300 million tonnes of crude steel capacity by 2030-31, recycled steel scrap is emerging as a critical raw material to support sustainable and cost-efficient steelmaking.

Currently, steel scrap accounts for nearly 21 percent of India’s crude steel production, significantly lower than the global average of around one-third. However, this share is set to rise steadily as new capacities come on stream and the industry moves towards cleaner production processes. Scrap availability in India is estimated to increase to nearly 36 million tonnes, indicating a widening gap between demand and supply as expansion gathers pace.

Speaking at the 13th International Material Recycling Conference and Exposition in Jaipur, Daya Nidhan Pandey, Joint Secretary, Ministry of Steel, said recycled steel scrap would play a decisive role in India’s long-term steel strategy. He noted that higher scrap usage helps conserve natural resources, reduce dependence on imported coking coal, lower emissions and support India’s net-zero commitment by 2070.

Pandey highlighted that the government has undertaken several policy measures to strengthen the recycling ecosystem. These include the Steel Scrap Recycling Policy 2019, the Vehicle Scrappage Policy, the rollout of registered vehicle scrapping facilities and the integration of scrap management with the broader circular economy framework. The recently notified Extended Producer Responsibility mandates for end-of-life vehicles and construction and demolition waste are also expected to accelerate formal scrap recycling.

Industry representatives echoed the need for policy support to unlock the sector’s full potential. Leaders from the recycling industry stressed the importance of rationalising GST on scrap, improving enforcement of EPR norms and encouraging digital transactions to bring unorganised scrap collectors into the formal economy.

As India moves towards 300 million tonnes of steel capacity by 2030 and an ambitious 500 million tonnes by 2047, experts believe steel scrap-based manufacturing will shift from being a supplementary input to a core pillar of growth, sustainability and global competitiveness for the Indian steel industry.