Page 30 - Steel Metallurgy eMagazine Volume September 2026

DEMAND FORECASTING

Having worked on both policy and will require maintaining this momentum Industry estimates indicate that
project implementation, one lesson over several more years while addressing bridging this capacity gap could require
I have observed repeatedly is that structural issues that continue to investments of nearly ₹10 lakh crore
investment decisions in the steel influence the sector's competitiveness. (approximately US\$120 billion) over the
sector are highly sensitive to market Those issues become more apparent coming years. Such investments depend
conditions. Large integrated steel plants when the current progress is compared not only on long-term confidence
require substantial capital investment against the scale of the remaining targets. in domestic demand but also on the
and have long gestation periods. Stable predictability of policy, access to finance
prices and greater visibility on future THE REMAINING and reasonable expectations regarding
demand encourage investment, whereas future profitability. Large steel projects
prolonged periods of price uncertainty CHALLENGE: typically have long gestation periods,
often result in delays or deferment CAPACITY and investment decisions taken today
of expansion plans. In that context, EXPANSION ALONE are based on market expectations
the recent improvement in market several years into the future rather than
conditions is encouraging because it WILL NOT BE prevailing market conditions alone.
creates a more favourable environment ENOUGH
for future capacity addition. During my tenure in the Ministry of Steel,
I had the opportunity to monitor the
At the same time, the current The progress achieved over the past progress of several major steel projects
momentum should be viewed with decade is significant and deserves across both the public and private
appropriate caution. The safeguard recognition. However, when viewed sectors. One observation has remained
duty is a temporary measure with a against the objectives of the National consistent over the years: announcing
phased reduction over the coming Steel Policy, it is equally clear that the capacity expansion is relatively
years. Sustained growth cannot depend next phase of growth will be more straightforward, but commissioning
indefinitely on trade protection. Over demanding than the last. projects within the planned timelines
the longer term, the competitiveness of is considerably more challenging. Land
the Indian steel industry will continue to While India's installed crude steel acquisition, environmental and forest
depend on productivity improvements, capacity has reached 220.3 MT, achieving clearances, financing arrangements, rail
cost efficiency, reliable raw material the policy target of 300 MT by 2030-31 connectivity, utility infrastructure and
availability and sustained domestic will require the addition of nearly 80 MT equipment procurement all influence
demand. of new capacity within a relatively short project schedules. Delays in any one of
period. Given the scale of investment, these areas can affect the overall pace of
Overall, the available evidence suggests statutory approvals and construction capacity creation.
that the National Steel Policy has timelines involved in integrated steel
delivered measurable progress over the projects, this represents a considerable Another important consideration is the
past decade. However, achieving the undertaking rather than a routine changing global market environment.
remaining distance to the 2030-31 targets expansion programme. The National Steel Policy was formulated
during a period when concerns relating
to carbon pricing and border adjustment
mechanisms were still evolving. Since
then, international trade has entered a
new phase.

The implementation of the European
Union's Carbon Border Adjustment
Mechanism (CBAM) represents one
such development. As the mechanism
enters its financial phase, Indian steel
exporters will increasingly need to
demonstrate lower carbon intensity
to remain competitive in European
markets. Although exports to Europe
constitute only a part of India's overall
India's Crude Steel Capacity: Actual Growth vs. 2030 NSP Target steel trade, CBAM signals a broader shift

28 STEEL & METALLURGY SEPTEMBER 2026