India’s leading steel companies are hopeful that the upcoming Modi 3.0 Budget will prioritize continued massive capital expenditure, particularly in infrastructure development and manufacturing, while ensuring fair competition against imports.
The infrastructure sector, the largest consumer of steel, has seen robust growth thanks to government initiatives, even amid global market challenges. Steel consumption surged by 13.6% in FY24, reaching 136 million tonnes, with strong finished steel production up by 12.7% year-on-year to 139 million tonnes, according to CRISIL.
T V Narendran, MD and CEO of Tata Steel, expects sustained infrastructure investments and improvements in the business environment. Jayant Acharya, Joint MD and CEO of JSW Steel, emphasizes the multiplier effect of infrastructure spending on the economy and urges continued government support in this area.
In addition to infrastructure, the steel sector is calling for enhanced focus on manufacturing. Ranjan Dhar, Director and VP of Sales and Marketing at ArcelorMittal Nippon Steel India (AM/NS India), stresses the need for significant manufacturing enhancements. Acharya of JSW Steel advocates for extending tax concessions and smoother incentives under the production-linked incentive scheme to bolster domestic manufacturing.
Despite ambitious expansion plans aligned with the government’s target to achieve 300 million tonnes of steel capacity by FY31, imports have affected prices. Dhar highlights the importance of protecting the industry from adverse impacts, suggesting an increase in basic customs duty from 7.5% to 12.5% on steel imports.
To address trade challenges, Alok Sahay, Secretary General of the Indian Steel Association, urges stricter rules of origin for steel imports and rectification of double taxation on iron ore to ensure a level playing field.
Looking ahead, the industry seeks policies to incentivize investments in decarbonization and promote low-carbon emission steel, particularly through government projects, to stimulate demand in this sector.