Steel industry needs ₹2 lakh crore annually to hit 500 MT capacity

India’s steel industry requires an unprecedented investment infusion of between ₹150,000 to ₹200,000 crore annually over the next two decades to scale its production capacity from the current 200 million tonnes to 500 million tonnes by 2047, according to Jayant Acharya, Joint MD & CEO of JSW Steel .

This massive financial commitment, driven by robust domestic demand and expansive government-led infrastructure projects, hinges on substantial private capital alongside sustained governmental support. Achieving such investment levels will critically depend on technological advancements, downstream integration, and notably, the industry's transition toward sustainable, green steel production.

Financing is, however, not the only challenge. Acharya emphasised that India's vulnerability stemming from geographical proximity and trade agreements with major steel-producing countries such as China, Japan, Korea, and ASEAN members, many of which enjoy zero-duty access to the Indian market. "India is surrounded by surplus steel-producing nations; we must remain cautious to protect our domestic industry," Acharya warned at the India Steel 2025 Expo.

The concern over imports isn't unfounded.

Over the past two years, India transitioned from a net steel exporter to a net importer, driven by surging domestic demand amid contracting global markets.

“India is the fastest-growing steel demand country, making us vulnerable to surplus steel from other nations. Western markets, such as the US and Europe, impose tariff barriers. US exports have been blocked for over two decades; Europe is tightening quotas further. Our D6 steel exports will be restricted,” said Acharya.

Recently, the government intervened, imposing a provisional 12% safeguard duty on key steel categories, including hot-rolled coils, sheets, and plates, aiming to mitigate market destabilization risks from imported steel priced below $675 per tonne to $964 per tonne for the five steel product categories.

Yet, additional challenges persist. Acharya pointed out to structural impediments, such as land acquisition complexities, delays in regulatory clearances—particularly environmental approvals—and India's reliance on volatile imported coking coal. Addressing these issues will be crucial for timely project execution and sustainable growth.

Further, even as the government is pushing the industry toward decarbonisation, Acharya said the transition requires substantial capital investment and supportive policies. “As a country, we must consider viability gap funding to transition to green steel,” Acharya advocated, besides clear governmental mandates akin to renewable energy obligations to incentivise green steel adoption in public infrastructure projects, thereby creating assured demand and attracting further investments.

India’s per capita steel consumption currently stands at approximately 98 kg and is expected to rise to 160 kg by 2030. In an earlier video message, Prime Minister Narendra Modi highlighted that the government’s infrastructure push—through initiatives such as PM Gati Shakti, the $1.3 trillion National Infrastructure Pipeline, the Smart Cities Mission, and rural programs such as the Jal Jeevan Mission and PM Awas Yojana—is driving up steel demand. He also noted that the mandate to use ‘Made in India’ steel in government projects has played a key role in boosting domestic consumption.