Steel Sector Eyeing Policy Initiatives To Safeguard Its Interests In 2025

New Delhi: Struck hard by surging imports, the Indian steel industry will be keenly eyeing policy initiatives in 2025 to safeguard its interests as it moves ahead with the 300 MnT capacity target amid volatile raw material prices. Another challenge in front of the industry will be to expedite its efforts to transition to clean manufacturing processes with the government's push to green steel production amid global thrust on cutting greenhouse gas emissions in hard-to-abate sectors. The government intervention will be essential as the Indian steel industry is in expansion mode to build a manufacturing capacity of 300 MnTPA by 2030 and would need investments worth around Rs 10 lakh crore to add the remaining 120 MnT capacity to achieve the target.

According to the Ministry of Steel, India remained a net importer of steel, with imports in April-September FY25 outpacing exports by a wider margin. In the April-September 2024 period, imports rose over 41 per cent to 4.70 million tonnes (MnT) from 3.33 MnT in the six-month period of the last fiscal. Official data showed exports came down by 36 per cent to 2.31 MnT from 3.60 MnT in April-September FY24. Regarding imports, the ministry said there is a growing demand from industry for protection against cheap imports from China directly or through countries like Vietnam, etc. The global trend also reflects heightened efforts to safeguard domestic industries. The EU has already imposed anti-dumping duties on cold and hot rolled stainless steel, while Brazil, Mexico, and the US have also implemented duties to protect their domestic markets, it added.

India's Steel Industry: Import Surge, Capacity Expansion, and Policy Expectations for 2025

On December 2, the steel ministry proposed a 25 per cent safeguard duty on certain steel products imported into the country during a meeting with the Commerce Department in the presence of Steel Minister HD Kumaraswamy and Commerce and Industry Minister Piyush Goyal. The Directorate General of Trade Remedies (DGTR), under the Commerce Ministry, has also initiated a probe into the alleged increase in imports of certain steel flat products into the country following a complaint from the apex industry body Indian Steel Association (ISA), whose members include Tata Steel, JSW Steel, AMNS India, Jindal Steel and Power and state-owned Steel Authority of India Ltd (SAIL). Industry members said out of the total imports of 5.7 MT of steel by India during April-November 2025, about 79 per cent came from China, Japan and Korea alone.

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The direct impact of increased imports into India has been the substantial decrease in the prices of steel products, particularly in the flat segment, where capacity expansion has been rampant in the recent past, in addition to the increase in inventories, they added. Despite headwinds, the industry has made some progress, looking to continue in 2025. In 2024, India's crude steel capacity is estimated at 180 MnT, up from 164 MnT in 2023. Production is expected at 146 MnT in 2024, higher than 130 MnT in 2023. Consumption is likely to be 145 MnT over 140 MnT in 2023. In 2025, the industry expects capacity to be 195 MnT, production to 158 MnT, and consumption to 155 MnT.

The sector expects policy support for the production and import of raw materials, including fiscal incentives, as it suffered in the market due to lower steel prices against high input costs in 2024. Coking coal, which was at USD 200/tonne at the end of Q2 (Jul-Sep FY-25), surged to USD 225/tonne in December, and iron ore, which cost USD 90/tonne, touched a level of USD 100/tonne, markets research firm BigMint said. Meanwhile, hot rolled coil (HRC) prices continued to fall from Rs 48,000/tonne at the end of Q2 to Rs 47,000/tonne in December.

India's Push for Green Steel: Decarbonisation Efforts and Industry Challenges Ahead

In December, the government introduced the taxonomy for green steel to promote clean practices and the use of alternate raw materials. "This is expected to give domestic players an edge given the European Union's proposed anti-emission measure CBAM, which discourages imports of steel produced through non-sustainable procedures. Steel producers need to hasten the process of decarbonization as most of the steel produced will not be able to qualify for even a three-star category with minimum Co2 emissions of 2.2 tonne/finished steel, PHDCCI Chair, Minerals, and Metals Committee," Anil Chaudhary said. 

Indian steel industry seeks policy support amid rising imports.

"Following the government's push to green steel, the industry will have to improve its energy efficiency, reduce blast furnace emissions through alternative fuels and carbon capture, utilization and storage (CCUS), and shift to cleaner gas-based methods via coal gasification," Dastur Energy CEO and President Atanu Mukherjee said.

Industry body CII also said the current roadmap and adoption of green steel in India has been slow, posing a hurdle for future development. Sharing the outlook for the sector in 2025, Ritabrata Ghosh, Vice President and Sector Head - Corporate Ratings, Icra, said the industry's capacity utilization is slated to slip below 80 per cent after a gap of four years. In the new year, the stainless-steel industry expects the government to launch a separate policy for the sector, which has different concerns. 

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Synergy Steels Director Anubhav Kathuria said, "A policy for stainless steel will be essential to realizing maximum capacity utilization, moving above current levels of 60 per cent, and contributing to economic and industrial development over the long term." The industry will prioritize driving demand for stainless steel in sustainable urban development, water infrastructure, and smart city projects in 2025, Indian Stainless Steel Development Association (ISSDA) President Rajamani Krishnamurti said.