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India is preparing for a major expansion of its steel industry, with the capacity targeted at 600 million tonnes per year by 2047 (compared with 220 million tonnes at the end of FY2025-26). This means capacity would need to increase by about 380 million tonnes (nearly 173%), over the next two decades.
India’s steel capacity expansion will significantly increase demand for raw materials. Iron ore demand is projected to reach 770 million tonnes by 2047, while coking coal demand could rise to 220 million tonnes. This indicates that securing reliable and competitively priced raw materials will become increasingly important for Indian steel producers.
The coking coal requirement is particularly significant because India remains highly dependent on imports for high-quality coking coal. Any disruption in Australia, the US, Canada, Russia or other major supply regions could therefore directly affect Indian steelmaking costs. The government’s plan to acquire overseas mining assets and develop international joint ventures could help reduce this supply risk over the long term.
India’s steel demand is already showing strength. During April-August, finished steel imports reached 3.5 million tonnes, up 29.5% year on year, with China accounting for 31.8% of imports. At the same time, 11.6 million tonnes/year of new steel projects received key approvals during April-June, indicating that capacity expansion is already moving forward.
From a market perspective, higher infrastructure, construction and automobile activity should support domestic steel consumption. However, rising raw-material costs, global trade restrictions and decarbonisation expenses could limit producers’ margins.
The biggest challenge will be balancing 600 million tonnes of steel capacity with sufficient iron ore, coking coal and low-carbon technology. If raw-material supply keeps pace with capacity growth, India could see sustained steel production and stronger long-term demand for iron ore, coking coal and related inputs.
