The Economic Survey 2025-26, tabled by the government ahead of the Union Budget, highlighted key challenges and structural pressures facing India’s steel industry, even as production and consumption continue to grow. Government data show the sector remains a core driver of industrial activity and infrastructure development, but significant risks persist around pricing dynamics and supply-chain security.
According to the survey, the domestic steel industry’s competitiveness is being tested by international price disparity, which has led to cheaper imports and weaker export margins. India, despite being one of the world’s largest crude steel producers, recorded a period of net steel imports during FY26 (April–October) because low international prices made imported steel more economical than locally produced volumes.
A major structural concern identified in the report is the industry’s dependence on imported coking coal. While India is largely self-sufficient in iron ore, the lack of a reliable domestic source of high-quality coking coal exposes steelmakers to global supply risks and price volatility. In response, the Ministry of Coal’s Mission Coking Coal, launched in 2022, aims to increase domestic raw coking coal production to 140 million tonnes by 2030 to reduce import dependence and strengthen supply security.
The survey also highlighted government initiatives to bolster the sector’s resilience, including the Production-Linked Incentive (PLI) Scheme for Specialty Steel with an outlay of ₹6,322 crore. As of October 2025, cumulative investment under the PLI scheme had reached over ₹23,000 crore, supporting production of 2.34 million tonnes of specialty steel and encouraging value-added manufacturing within the country.
Despite these challenges, key performance indicators for the industry remained robust in the first part of FY26. Crude steel production grew by around 11.7 per cent, with finished steel output rising by about 10.8 per cent, while steel consumption increased by roughly 7.8 per cent compared with the same period a year earlier.
The Economic Survey’s assessment underscores the need for continued policy action to address price pressures, strengthen raw material self-reliance and enhance competitiveness, even as India’s steel sector contributes to broader economic growth and infrastructure expansion.
