Steel sector faces challenges of international price disparity, raw material security: Economic Survey

The domestic steel sector faces challenges related to international price disparity and raw material security, the Economic Survey said on Thursday.

Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2025-26 in the Lok Sabha on Thursday.

The steel sector serves as the backbone of industrialisation and infrastructure, securing India’s position as the world's second-largest crude steel producer, the government document said.

The sector has undergone a major transformation in the last five years, largely driven by strong domestic demand from the construction and manufacturing sectors, it said.

"However, the sector faces challenges related to international price disparity and raw material security. India was also a net importer of steel during FY26 (April–October), primarily due to low international prices, which resulted in lower margins on exports and cheaper imports," the survey stated.

While India is largely self-sufficient in iron ore, the industry faces critical dependence on imported coking coal.

To mitigate global supply risks, the Ministry of Coal launched Mission Coking Coal in 2022 to significantly enhance domestic raw coking coal production to 140 MT by 2030.

A Production-Linked Incentive (PLI) Scheme for Specialty Steel with an outlay of Rs 6,322 crore was also introduced in 2021 to sustain the sector's growth and foster self-reliance. As of October 2025, cumulative investment under the PLI scheme reached Rs 23,022 crore, with production of 2.34 million tonnes (MT) of specialty steel.

In the 2025-26 fiscal year, crude steel production grew by 11.7 per cent, finished steel production increasing by 10.8 per cent, and consumption rising by 7.8 per cent during April-October 2025-26, compared to the corresponding period last year.