India Proposes Steel Industry Expansion despite Apprehensions over US Tariff Increases
India, the world's second-largest steel producer, is making significant strides in its steel industry with major players like Tata Steel, JSW Steel, and Steel Authority of India Limited (SAIL) leading the charge.
In the first quarter of FY25, India's crude steel production reached an impressive 36.61 million tonnes (MT). This growth is a testament to the government's focus on the manufacturing sector, with the aim of making India self-reliant and a major global manufacturing hub.
The current Indian government initiatives to boost the steel sector and promote self-reliance include the Production Linked Incentive (PLI) scheme for specialty steel, import safeguard duties, strategic joint ventures, a strong focus on innovation and sustainability, and digital transformation.
One of the key initiatives, the PLI scheme for specialty steel, offers ₹6,300 crore to manufacturers to boost high-value products like alloy steels, defense-grade steel, and automotive-grade materials, incentivizing quality and output expansion. Another significant move is the proposed 25% safeguard duty on steel imports, effective from December 2024, which protects domestic manufacturers from volatile global prices and supports self-reliance goals.
Strategic joint ventures, such as the one between JSW Steel and South Korea’s POSCO to build a 6 million tonnes per annum integrated steel plant using renewable energy and advanced tech, align with Atmanirbhar Bharat’s self-reliance and sustainability objectives.
The government's initiatives also extend to the National Steel Policy 2017 and continued policy support, encouraging investment, infrastructure spending, and budget allocations to the Ministry of Steel, facilitating sector growth.
India is also advancing low-carbon steel production methods like green hydrogen-based Direct Reduced Iron (DRI), aiming to bridge the supply-demand gap in construction, infrastructure, and automotive sectors while aligning with carbon neutrality and net zero goals by 2070.
In terms of digital transformation, large domestic steelmakers such as Tata Steel and JSW Steel are adopting AI-driven technologies for yield forecasting, predictive maintenance, and energy efficiency, enhancing competitiveness and manufacturing quality.
The government has also launched the Steel Research Technology Mission of India (SRTMI), a joint initiative of the Indian steel industry and academia, to help early-stage start-ups develop new technologies in the steel sector. The SRTMI aims to promote growth in the steel industry by identifying and solving critical sector challenges of national interest, supporting open research proposals from academia and researchers in collaboration with industry, and helping early-stage start-ups develop cutting-edge steel technologies.
India's steel sector has shown strong growth, with engineering exports to the US rising by an annual 9% to $15.6 billion from April 2024 to January 2025, driven by an increase in shipments of aircraft parts, electrical machinery, automobiles, industrial machinery, and medical instruments. In January 2023 alone, India's exports of engineering goods to the US jumped 18% year-on-year to $1.62 billion, outpacing the sector's overall growth of 7.44%.
Despite the promising growth, the steel sector faces challenges such as plant efficiency, adoption of artificial intelligence and machine learning, digitisation, and decarbonisation. The government is considering various steps to address these challenges, including innovative new technologies and practices, more production-linked incentives (PLI schemes), duty cuts in imports and exports, increasing consumption demand, and offering a wide range of steel products.
The government is also reviewing export-oriented countries and initiating policy measures to boost Indian steel exports in these countries. Indian steel companies export products to over 100 countries, indicating a strong global presence.
In conclusion, the Indian steel sector is undergoing a transformative period, driven by a comprehensive framework of initiatives aimed at boosting growth, fostering self-reliance, and ensuring global competitiveness, all in line with the Atmanirbhar Bharat vision.
Technology is being integrated into India's steel sector, with domestic steelmakers like Tata Steel and JSW Steel adopting AI-driven technologies for yield forecasting, predictive maintenance, and energy efficiency.
Sports and technology have potential synergies, as the current trend in the steel sector involves a strong focus on innovation and sustainability, which could lead to the development of eco-friendly materials suitable for sports equipment manufacturing.
