India approves 11.63 mnt crude steel capacity in Q1 FY’27; Odisha leads expansion pipeline

• FY’26 approvals included 22.41 mnt of long products,16.21 mnt of flat steel capacity
• Induction furnace projects account for 54% of approved capacity
• Odisha, Jharkhand, Chhattisgarh remain the country’s principal steel investment hubs

Morning Brief: India’s crude steel expansion pipeline remained active in Q1 FY’27, with 11.63 million tonnes per annum (mnt/year) of capacity receiving approvals across the environmental clearance (EC) and consent-to-establish (CTE) stages. The latest approvals indicate that investment momentum remains intact across both integrated and secondary steelmaking routes, with eastern India continuing to attract the largest share of new projects.

BigMint data show that around 5.9 mnt progressed through the CTE stage, while a further 5.7 mnt received environmental clearance, reflecting a healthy pipeline of projects moving through successive regulatory stages.

Environmental clearance and consent to establish remain key milestones in India’s project approval process, serving as leading indicators of future steelmaking capacity rather than immediate production additions.

Eastern India continues to anchor steel expansion

Eastern India retained its position as the country’s primary destination for steel investments during Q1 FY’27. Odisha accounted for the largest share of approved crude steel capacity at 3.37 mnt, followed by Jharkhand at 2.57 mnt and Chhattisgarh at 2.53 mnt. Together, the three mineral-rich states accounted for nearly three-quarters of all crude steel approvals during the quarter.

Odisha’s approvals were entirely through the basic oxygen furnace (BOF) route, reinforcing its position as the preferred location for integrated steelmaking investments. Jharkhand’s approvals comprised 2.12 mnt of induction furnace (IF) capacity and 0.44 mnt of electric arc furnace (EAF) projects, highlighting continued expansion by secondary steelmakers. Chhattisgarh recorded a balanced mix of 1.30 mnt of BOF capacity and 1.23 mnt of IF capacity, reflecting investment across both integrated and secondary steelmaking routes.

West Bengal secured approvals for 1.26 mnt, led by 1.06 mnt of IF capacity and 0.20 mnt of EAF capacity. Other states recording approvals included Tamil Nadu (0.60 mnt), Daman & Diu (0.58 mnt), Uttarakhand (0.27 mnt), Maharashtra (0.26 mnt), Bihar (0.17 mnt) and Puducherry (0.02 mnt).

Secondary steelmakers continue to drive approvals

The route-wise mix indicates that secondary steelmakers continued to account for the largest share of approved capacity during the quarter. IF-based projects totalled 6.32 mnt, representing 54% of all approvals, while BOF projects accounted for 4.67 mnt (40%). EAF projects remained comparatively limited at 0.64 mnt, or 6% of the total pipeline.

The latest approvals suggest capacity creation continues to be distributed across both integrated and secondary steelmaking routes rather than indicating a structural shift towards any single technology. Large integrated producers continue to invest through BOF-based projects, while IF capacity additions remain the principal growth avenue for the secondary steel sector.

Expansion remains focused on long products
Downstream approvals indicate that the current investment cycle remains concentrated in construction steel. Long product rolling mill approvals reached 6.1 mnt during the quarter, comprising 1.6 mnt at the CTE stage and 4.5 mnt at the EC stage.

No flat steel expansion approvals, including hot rolled coil (HRC) and plate capacity, were recorded during Q1 FY’27. This marks a contrast with FY’26, when regulatory approvals included 16.21 mnt of flat steel capacity alongside 22.41 mnt of long product rolling capacity, indicating that while flat steel emerged as a significant component of last year’s expansion pipeline, investment during the latest quarter was concentrated entirely in long steel products.

Outlook

The Q1 FY’27 approvals indicate that India’s steel expansion pipeline remains active, with projects continuing to progress through successive regulatory stages despite an uncertain global steel environment. The latest approvals reinforce the broader expansion trend, with eastern India continuing to dominate new investments while capacity creation remains distributed across both integrated and secondary steelmaking routes. As these projects advance towards construction and commissioning over the coming years, they are expected to support incremental demand for iron ore, pellets, DRI and other upstream raw materials while strengthening India’s long-term steelmaking capacity.