14 - 08 - 2026

India’s steel demand to reach 192 mt by 2030, driven by booming construction, infra

India’s steel demand is projected to reach 192 million tonne (mt) by 2030, with the next phase of growth driven not only by infrastructure but also by higher-value steel, cleaner production and better management of price risks.

India’s steel consumption rose to 149 mt in FY25 from 136 mt in FY24 and is projected to reach 192 mt by 2030, at a CAGR of about 6-7 per cent, according to a report by MCX.

Construction and infrastructure currently account for 59 per cent of consumption and are expected to contribute 60-63 per cent of demand by 2030. The report estimates that the infrastructure pipeline could unlock another 25-30 mt of steel demand as logistics, financing and execution constraints ease.

Construction, roads, railways, urban infrastructure and housing will remain major demand drivers. At the same time, rising activity in automobiles, electric vehicles, renewable energy and manufacturing is creating demand for steel suited to more specialised uses. TMT bar consumption stood at 42 mt in FY25, with demand projected to reach 75 mt by FY33 at a CAGR of about 7 per cent.

India continues to import some advanced and application-specific grades even as exports remain concentrated in lower-margin products. The specialty steel Production-Linked Incentive scheme is helping bridge this gap, with PLI 1.0-1.2 representing more than ₹55,000 crore in committed investment.

Fit-for-purpose output

The product story is no longer about tonnes, it is about fit-for-purpose output, the report said. Indian mills are increasingly targeting products for sectors such as renewables, EVs and capital goods, creating scope to improve the value generated from rising steel demand.

India’s growth will also need to be matched by efforts to lower the carbon intensity of steel making. The report puts the sector’s emissions intensity at 2.55 tonne of CO₂ per tonne of crude steel, compared with roughly 1.4 tonne in the US and about 1.9 tonne in the EU. The share of blast furnace-based production is projected to rise from 42 per cent to 56 per cent by 2030.

The report highlights renewable energy, energy efficiency, greater scrap use, green hydrogen and carbon capture among the measures being pursued to reduce emissions. The PAT scheme had delivered about 6.1 mt of oil-equivalent savings by 2022. If renewable energy’s share in steelmaking rises to 43 per cent by 2030, the report estimates emissions intensity could fall to 2.35 tonne of CO₂ per tonne of crude steel, from 2.54 tonne in 2022.

Global trade rules are also making emissions performance increasingly important for exporters. The report notes that the EU’s Carbon Border Adjustment Mechanism is in its definitive regime, while the UK is set to introduce CBAM in January 2027.

Iron ore consumption to rise

As steel making expands, the availability of adequate and appropriate raw materials will become increasingly important. Iron ore consumption is projected to rise about 40 per cent to 360 mt by FY30, from 256 mt in FY25. Meanwhile, the proportion of higher-grade ore has come down from about 50 per cent in FY20 to about 35 per cent in FY26, requiring higher processing and pelletisation. By 2030, it is forecast that pellets will make up about 38 per cent of the charge mix in blast furnaces.

The report highlights the raw material security and price risk further suggesting growing importance of hedging in India for businesses and market participants. With the price volatility at play, commodity markets should provide effective tools to manage price risks across steel and raw material commodities.

The report also notes the volatile swings in steel and raw material prices over the past year. Odisha iron ore fines rose from about ₹5,100 a tonne in July 2025 to ₹5,900 in January-February 2026, before falling to around ₹4,900 by July. Mumbai BF-route rebar moved from about ₹47,000 a tonne to ₹60,250 before correcting to ₹48,840 by July.

Such volatility makes price-risk management and hedging increasingly important for steel producers and users. “Prudence, therefore, calls for managing this risk using financial instruments such as Exchange-Traded derivatives on steel or iron ore,” the report said. MCX launched its Steel Rebar futures contract in January 2024, providing an exchange-traded mechanism for managing steel-price risk.

The report sees an opportunity for India to strengthen its steel industry by combining rising domestic demand with greater value addition. Cleaner production, secure raw material supplies and stronger risk-management mechanisms in steel industry will help create further production and global demand. This could help Indian steelmakers build a more competitive and resilient position in both domestic and global markets.