India's Steel Sector: Challenges and Future Prospects

India's steel industry is targeting a 300 MTPA capacity by 2030-31 but faces hurdles like coking coal dependency and steel scrap availability. External pressures from imports, tariffs, and logistics costs also pose challenges. A multi-strategy approach is key to meeting targets and enhancing global competitiveness.

India's steel sector, the cornerstone of the nation's infrastructure ambitions, is set on reaching a production capacity of 300 million tonnes per annum (MTPA) by 2030-31. However, the path is strewn with challenges, including an 85% reliance on imported coking coal and limited steel scrap availability, according to MP Financial Advisory Services LLP.

The financial advisory firm identified several hurdles, including low-cost imports from China, European Union safeguard duties, and carbon tariffs, which could affect the industry's growth trajectory. India's steel players are also grappling with high logistics costs and a lengthy approval process for new projects, which are compounded by steeper financing costs compared to China.

Despite these challenges, the steel sector aims to achieve its targets through a comprehensive strategy focused on investments in green and value-added steel, infrastructure improvements, clean technology adoption, policy reforms, and a robust public-private partnership model. Innovation and sustainability are seen as pivotal for India's aspirations to become a global hub in green steel production.

(With inputs from agencies.)