India Iron Market Outlook to 2030

India Iron Industry Market Overview

• India Iron Industry had made exceptional growth in the historical period of 2018-2023, this is reflected by India iron steel market size reaching a market size of USD 182 Bn driven by the increasing demand from construction and infrastructure sectors, as well as automotive and machinery manufacturing. The robust industrial growth and urbanization in India have boosted the consumption of iron, making it a cornerstone of the nation’s industrial framework.

• Key players in the Indian iron industry include Tata Steel Limited, JSW Steel Ltd., Steel Authority of India Limited (SAIL), Essar Steel India Ltd., and Jindal Steel and Power Ltd. These companies dominate the market through extensive production capacities, strong distribution networks, and a focus on technological advancements to improve efficiency and reduce costs.
• Mumbai, Delhi, and Chennai are the dominant cities in the Indian iron market. These cities are major industrial hubs with important construction activities and infrastructure development. The presence of large-scale manufacturing units and ports also contributes to the high consumption and distribution of iron products in these regions.
• Tata Steel is expanding its Kalinganagar facility, increasing its current capacity from 3 million tonnes per annum (MTPA) to 8 MTPA. This ambitious expansion, still in progress as of July 2023, aims to position Tata Steel as a global leader in the iron and steel industry.

India Iron Industry Segmentation

The India Iron Industry is segmented by various factors like product, application, and region.

• By Product: The India iron market is segmented by product type into pig iron, wrought iron, and cast iron.In 2023, pig iron held the largest market share. Its dominance is attributed to its use as a raw material for manufacturing steel, which is essential for construction and industrial applications. The widespread availability of iron ore and the efficiency of blast furnace production techniques further bolster its market position.
• By Application: The market is segmented by application into construction, automotive, and machinery. The construction segment dominated the market in 2023, driven by extensive infrastructure projects and urban development plans. The demand for durable and high-strength materials makes iron a preferred choice for building and construction activities, including residential and commercial buildings, bridges, and roads.
• By Region: The India iron market is segmented into north, south, east, and west regions.The North region dominated the market in 2023 due to industrial activities and the presence of numerous steel manufacturing plants. The region’s robust infrastructure development and proximity to raw material sources also contribute to its leading position.

India Iron Industry Competitive Landscape

• JSW Steel Ltd.: In May 2024, JSW Steel announced plans to invest over INR 19,000 crore to expand its Dolvi plant in Maharashtra, increasing capacity by 5 million tonnes to a total of 15 million tonnes per annum by September 2027. This investment will enhance production of value-added special steel products, with costs comparatively lower than the global average.
• Steel Authority of India: In 2020, SAIL reported a crude steel production capacity of 21 million tonnes following an important expansion. The company aims to reach 50 million tonnes of hot metal production by 2031. SAIL's diverse product range and extensive distribution network position it as a leader in the domestic steel industry and among the top global producers.

India Iron Industry Analysis

India Iron Industry Growth Drivers

• Infrastructure Development Projects: The Indian government has been investing heavily in infrastructure development, with projects like Bharatmala Pariyojana and Sagarmala Programme, which aim to develop roads, highways, and coastal areas. In 2024, the government allocated INR 130 billion for these projects, boosting the demand for iron and steel products. These initiatives are expected to drive the consumption of iron in construction and transportation infrastructure, leading to sustained market growth.

• Automotive Sector Expansion: The automotive sector in India is a critical driver of demand in the iron and steel industry. In 2023, the production of passenger vehicles reached 4.1 million units, underscoring the sector's contribution to the economy. This burgeoning growth is propelled by rising consumer incomes, increased urbanization, and government initiatives aimed at boosting the manufacturing sector.
• Industrial Growth and Manufacturing: India's industrial output saw a rise in April 2024, the Index of Industrial Production (IIP) recorded a growth of 5% compared to the same month in the previous year. Additionally, the IIP growth for May 2024 was reported at 5.9% year-on-year.This industrial expansion, particularly in sectors like machinery, equipment, and tools manufacturing, has led to an increased demand for iron. The Make in India initiative has further accelerated industrial activities, creating a strong demand for raw materials like iron.

India Iron Industry Challenges

• Raw Material Supply Fluctuations: The iron industry in India faces challenges due to fluctuations in the supply of raw materials, particularly iron ore. In 2024, disruptions in mining activities in key states like Odisha and Jharkhand led to substantial decrease in iron ore availability, affecting production schedules and increasing costs for iron manufacturers.

• Environmental Regulations and Compliance: Stricter environmental regulations imposed by the Ministry of Environment, Forest and Climate Change in 2024 have increased the operational costs for iron manufacturers. Compliance with these regulations, such as reducing carbon emissions and managing industrial waste, requires investments in technology and infrastructure, posing a challenge for the industry.

India Iron Industry Government Initiatives

• The National Steel Policy (NSP): The National Steel Policy (NSP) 2023 aims to enhance India's steel production capacity to 300 million tons by 2030, focusing on developing new plants and modernizing existing facilities. Additionally, the government extended the Production Linked Incentive (PLI) scheme to the iron and steel sector, expecting to attract around INR 250 billion in investments over the next five years to boost domestic production.

• Production Linked Incentive (PLI) Scheme: In 2024, the government extended the PLI scheme to the iron and steel sector, providing financial incentives for boosting domestic production. This initiative is expected to attract investments of around INR 250 billion over the next five years, promoting the growth and modernization of the iron industry.

India Iron Future Industry Outlook

The India Iron Industry is poised for remarkable growth, driven by expansion of renewable energy projects, advancements in automotive manufacturing, and digital transformation and industry 4.0.

Future Market Trends

• Expansion of Renewable Energy Projects: By 2028, the demand for iron in renewable energy projects, such as wind and solar farms, is expected to rise remarkably. The government's target to achieve 500 GW of renewable energy capacity by 2030 will drive the need for substantial quantities of iron for manufacturing wind turbine structures and solar panel mounts.

• Advancements in Automotive Manufacturing: The future of the Indian iron industry will be closely tied to advancements in automotive manufacturing. The push towards electric vehicles (EVs) and hybrid cars is expected to increase the demand for high-quality iron and steel components. By 2028, the production of EVs in India is projected to boosting the iron industry's growth.