 "steelmakers, steel")
Five-year-low steel prices have forced around 150 small producers to shut down operations and 50 others to cut output by half, raising concerns over the sector’s ability to invest ₹9 lakh crore required for funding its next phase of capacity expansion, steel ministry's Secretary Sandeep Poundrik said on Tuesday.
Speaking at a conference organised by the Confederation of Indian Industry (CII), Poundrik said the current price levels, while manageable for larger players, have severely hurt smaller firms. “Price is a problem. About 150 small players have stopped production because of low prices and about 50 of them have reduced their production by less than 50 per cent,” he said.
He cautioned that subdued prices could jeopardise fresh investment. India needs to add 100 million tonnes (mt) of steelmaking capacity in the next five to seven years, and another 100 mt soon after, requiring an estimated $100 billion (₹8.5–₹9 trillion). “From where this money will come, if the prices are not reasonable,” he asked.
While demand fundamentals remain strong, he pointed to challenges ranging from import dependence to perception issues.
India is the only major economy where steel consumption has risen in double digits—over 12 per cent—for the past three years. Consumption this year is growing at 8.5 per cent and is likely to accelerate in the second half. Per-capita use has climbed to 108 kg in FY25, still below the global average of 225 kg.
On raw materials, Paundrik flagged that 90 per cent of coking coal used by the industry is imported, and this dependence “is likely to increase” as capacity grows. He urged faster development of iron-ore mines, noting India has sufficient reserves to meet both domestic and export demand.
To protect local producers from cheap inflows, the government has imposed provisional safeguard duties and strengthened quality-control orders to block substandard imports.
Looking ahead, Paundrik identified opportunities in green and specialty steel. Falling hydrogen prices–recent bids at ₹280 per kg–could make hydrogen-based Direct Reduced Iron (DRI) viable within five to 10 years, helping India cut its carbon footprint and remain export-competitive under the impending EU’s Carbon Border Adjustment Mechanism.
The government is also planning a National Mission on Sustainable Steel and has directed state-owned firms to prefer indigenous technologies and capital goods to boost self-reliance.
Paundrik expressed confidence that India will meet, and likely exceed, the Prime Minister’s target of 500 mt steel capacity by 2047, with a sector that is “globally competitive and sustainable.”
