Steel Demand in India Surges, Led by Infrastructure and Real Estate Sectors
India's steel consumption is largely driven by the infrastructure and construction sectors, accounting for 65% of total steel production. Government projects and a booming real estate market are key contributors to this growth.
Steel DemandInfrastructureReal EstateGovernment ProjectsSafeguard DutyReal EstateJul 28, 2025
Complementing this, Chief Executive Officer and President, Advisory at CARE Analytics and Advisory Pvt Ltd, Ms. Swati Agrawal, emphasised that real estate’s recent boom has been a crucial growth driver for the steel industry. She also pointed to the evolving automobile sector, highlighting the transition to electric vehicles and the associated charging infrastructure as emerging contributors to steel demand.
To support domestic manufacturers and shield them from cheaper imports, the Central Government imposed a 12% safeguard duty on steel imports in April 2025. This measure primarily targets imports from China, India’s second-largest steel supplier after South Korea, by setting minimum import prices for key steel product categories ranging from Rs. 58,398 (US$ 675) to Rs. 83,378 (US$ 964) per tonne. He acknowledged that the safeguard duty has provided a protective cushion, insulating Indian producers from the influx of low-cost foreign steel and positively impacting the sector’s competitiveness. This tariff protection is seen as vital to sustaining India’s steel industry amid growing domestic demand and global market pressures.
The Indian government’s focus on infrastructure development is a significant factor driving steel demand. Projects such as the National Infrastructure Pipeline (NIP) and various smart city initiatives are creating a robust pipeline of opportunities for steel producers. The NIP, launched in 2019, aims to invest Rs. 111 lakh crore (US$ 1.5 trillion) by 2025, with a significant portion allocated to infrastructure development. This substantial investment is expected to boost steel consumption and support the growth of the domestic steel industry.
In the real estate sector, the government’s push for affordable housing under the Pradhan Mantri Awas Yojana (PMAY) has also contributed to increased steel demand. The scheme aims to provide housing for all by 2022, driving the construction of millions of new homes and, consequently, the need for steel. Additionally, the commercial real estate market is witnessing a resurgence, with new office spaces, shopping malls, and industrial parks being developed across major cities.
The automobile sector, particularly the shift towards electric vehicles (EVs), is another emerging contributor to steel demand. The government’s push for EV adoption, coupled with the development of charging infrastructure, is creating new opportunities for steel producers. The construction of EV charging stations, manufacturing of EV components, and the expansion of the EV ecosystem are all driving the demand for steel.
Despite these positive trends, the steel industry faces challenges such as rising input costs, environmental regulations, and global economic uncertainties. However, the protective measures implemented by the government and the strong domestic demand are helping to mitigate these challenges and ensure the sustainability of the sector.
In conclusion, the Indian steel industry is on a growth trajectory, driven by robust demand from infrastructure, construction, and real estate sectors. Government initiatives and protective tariffs are playing a crucial role in supporting domestic producers and ensuring the sector’s competitiveness in the global market.
Frequently Asked Questions
What sectors drive steel demand in India?
The infrastructure and construction sectors, along with real estate, are the primary drivers of steel demand in India, accounting for 65% of total steel production.
What is the role of government projects in steel consumption?
Around 25-30% of steel is used in government projects, reflecting the significant investments in roads, bridges, and other public infrastructure.
How does the real estate sector contribute to steel demand?
The boom in the real estate market, particularly under schemes like the Pradhan Mantri Awas Yojana, has significantly increased the demand for steel in the construction of new homes and commercial spaces.
What is the impact of the 12% safeguard duty on steel imports?
The 12% safeguard duty, imposed in April 2025, protects domestic steel producers from cheaper imports, primarily from China, by setting minimum import prices and enhancing the sector’s competitiveness.
How is the automobile sector contributing to steel demand?
The transition to electric vehicles and the development of associated charging infrastructure are emerging as significant contributors to steel demand in the automobile sector.
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