Economic Survey Flags Global Price Pressures, Raw Material Risks for India’s Steel Sector

India’s steel sector remains a critical pillar of the country’s industrial and infrastructure growth, but global price pressures and raw material security concerns are emerging as key challenges, the Economic Survey 2025–26 has said. The survey underlined that while the sector has made significant progress in recent years, external market dynamics continue to influence its performance.

The government document noted that the steel industry has undergone a major transformation over the last five years, largely supported by strong domestic demand from construction, infrastructure development and manufacturing activities. This sustained demand has helped India maintain its position as the world’s second-largest producer of crude steel.

However, the Economic Survey cautioned that international price disparities have affected trade dynamics. During the current financial year so far, India turned into a net importer of steel, primarily due to lower global prices. These price levels reduced export margins for domestic producers while making imports more attractive, adding pressure on the sector.

While India is largely self-sufficient in iron ore, the survey highlighted the industry’s heavy dependence on imported coking coal as a key vulnerability. This dependence exposes steel producers to global supply disruptions and price volatility, impacting cost structures and long-term planning.

To address these concerns, the government has taken several policy initiatives aimed at strengthening domestic capacity and reducing import reliance. The Ministry of Coal’s Mission Coking Coal, launched in 2022, targets a significant increase in domestic raw coking coal production by 2030. In parallel, the Production-Linked Incentive scheme for specialty steel has been introduced to promote value-added production and enhance competitiveness.

The survey also pointed to healthy operational performance during the year. Crude steel production, finished steel output and consumption recorded steady growth during the April–October period, reflecting continued momentum in infrastructure spending and industrial activity.

Looking ahead, the Economic Survey said sustained policy support, improved raw material security and stable global markets will be crucial for the steel sector to maintain growth, manage risks and support India’s broader economic and infrastructure ambitions.