How did India’s iron and steel industry perform in 2025?

• Crude steel production rises 10%, demand up 8% on-year
• Domestic iron ore output rises just 4%, imports jump sharply
• Composite index down 6% as steel prices drop to 5-year lows

Morning Brief: Among the major world economies, India was the only one which showed consistent growth in steel production and demand in 2025. The global slowdown brought about by high capital costs, persistent inflation in the advanced economies, trade wars and tariff uncertainties, construction and manufacturing slowdown, and de-growth in China, advanced Asia and the EU had a detrimental impact on global steel production, which declined by 2% y-o-y in January-November 2025, as per World Steel Association (WSA) data.

India, however, was a study in contrast. The country’s crude steel production capacity increased by over 10% y-o-y in FY’25 to reach 205 million tonnes (mnt). Fast-paced economic growth and urbanisation, government spending on infrastructure, as well as raw material self-sufficiency boosted capacity in both the private and public sectors. However, the Indian steel sector was not immune to global headwinds in 2025 as the brief sketch below will show:

CY’25 steel industry highlights

Production, consumption surge: BigMint data show that the country’s crude steel production increased by 10% y-o-y compared to 2024 to reach 164 mnt in 2025 from 149 mnt in the previous year. Total increase in volume terms was around 15 mnt. Growth was seen in the BF-BOF as well as the EAF-EIF routes of production, with the private and public sectors both witnessing an increase in output.

In contrast growth in 2024 was far modest at 6% y-o-y due to pre-General Election market slowdown in the beginning of 2024 and high inflows of cost-competitive steel imports into the domestic market.

Steel consumption saw a growth of 8% y-o-y to reach 160 mnt, an increase of 12 mnt on-year. Not only was consumption growth a tad slower than production, it also moderated a bit in H2 of the calendar year.

The massive public spending announced in Budget 2025 for large connectivity projects and urban development, with an allocation of over INR 11.5 lakh crore for infrastructure, drove steel consumption. Major government initiatives such as housing for all, Bharatmala, Sagarmala, dedicated freight corridors of the Indian Railways, civil aviation and airports, metro railways, etc. account for rising steel demand.

Imports drop, exports rise marginally: India was a net steel importer in CY’25, with the steel trade deficit standing at around 1.2 mnt, expanding from 0.7 mnt in H1CY’25 despite the decrease in import shipments.

Steel imports dropped 13% y-o-y to around 9.6 mnt from the record 11 mnt recorded in 2024 as the provisional safeguard duty, implemented in April, turned imports unviable compared to domestic products in terms of landed costs from key geographies such as Japan and China. The government finally announced a three-year tiered safeguard structure on 31 December after the provisional duty expired in November.

Steel exports by India, however, saw a brisk recovery in H2CY’25 after decreasing by a sharp 24% in the first half, thanks to restocking by European buyers before the coming into force of the EU’s carbon trade levy, CBAM, from 1 January 2026. Apart from this, weak global demand and high Chinese export volumes directly affected India’s prospects.

BigMint’s composite index drops 6% y-o-y: The steel composite index, a barometer of the domestic steel market, fell by 6% y-o-y in CY’25 to reach historic lows as domestic steel prices fell to five-year lows. A weak global pricing environment, extended monsoon, and high domestic supplies affected steel prices.

The year opened with the index moving in a narrow range, at around four-year lows. However, it started surging from March, around the time the safeguard duty was announced only to again start softening from April, with buying interest fading and price resistance emerging. Inventories also swelled. The early onset of the monsoon dampened construction activity, leading to a steady decline in steel prices. The index continued to edge lower throughout the latter half reaching multi-year lows in November.

Steel raw materials landscape

Iron ore production: BigMint data show that India’s iron ore production rose by 4% y-o-y in CY’25. This, notably, was far lower than the pace of steel production growth at 10%. Iron ore output increased at a tardy pace despite considerable capacity expansions by private and PSU miners due to the delay in operationalisation of auctioned mines, decline in production in Odisha, the country’s leading mineral-bearing state, as well as pricing and cost/tariff pressures faced by both private and public sector miners which impacted output.

However, higher output in states like Maharashtra contributed to keeping total production volumes higher than CY’24.

Iron ore imports surge, exports plunge: Iron ore imports by India surged over 120% y-o-y in CY’25 to reach multi-high highs due to a) quality considerations of Indian mills looking to enhance efficiency and output; b) restrained growth in domestic production; c) logistical bottlenecks and costs in India prompting west coast-based mills to source from the Middle East; and d) regional supply issues and quality concerns leading to higher pellet imports.

Exports of iron ore and pellets decreased sharply by 34% y-o-y to around 25 mnt, as per data, from nearly 38 mnt in CY’24. This was primarily due to weak demand from China, which absorbs around 95% of Indian exports, on declining steel production in that country and production controls affected to control overproduction.

That apart, discussions centering on an export duty on iron ore and pellets amid weak domestic production and higher domestic realisations for domestic pellet producers kept exports on a tight leash, BigMint understands.

Met coal imports rise: India’s exports of steelmaking coal, or metallurgical coal, increased by 8% on-year to reach to over 82 mnt. Indian and Southeast Asian demand sustained the met coal market in CY’25 as Chinese and Asian demand wilted. India’s import diversification strategy continued, with US and Russian shipments witnessing an uptick compared to Australian volumes. Average prices, too, fell by over 20% in CY’25.

Non-coking coal imports drop 6%: The country’s non-coking coal imports dropped for the first time in many years, with total inbound shipments recorded at around 162 mnt, a decrease of 6% y-o-y. This development assumes higher significance in the light of the fact that domestic coal production declined by 2% in CY’25. The decline in imports can be traced to a) lower thermal generation for the first time in decades and, as a result, higher stocks at power plants, and b) phenomenal surge in hydro and renewable electricity output in CY’25.

Domestic scrap output up, imports rise slightly: BigMint assessment shows that the country’s domestic scrap generation reached around 32 mnt in the year just gone by, an increase of 8% y-o-y. Affirmative government policy action meant to boost generation, such as post-consumer vehicle scrap recovery, over and above the rising potential of a fast-growing consumer economy, gave a thrust to domestic generation.

Nevertheless, higher steel output still necessitated imports which saw a marginal growth of 2%. The growth was slight, however, because a) higher metallics output offset greater dependence on scrap, b) domestic scrap remained more viable in terms of costs compared to imports and c) weak finished steel prices and cost economics discouraged imports for many small and medium producers.