Posted on 26 Jan 2026
India’s crude steel production expanded at a double-digit pace in 2025, standing out sharply against a contracting global steel sector and underscoring the increasingly structural nature of the country’s demand growth.
India produced 164.9 million tonnes of crude steel in January-December, up 10.4% year-on-year, according to latest worldsteel data. December output rose 10.1% on-year to 14.8mt, confirming that momentum was sustained through the end of the year rather than front-loaded.
This performance positioned India as the only country, among the world’s top ten steelmaking nations, with a double-digit growth rate on both a monthly and full-year basis in 2025, even as most major producers reported declining output, Kallanish notes.
Comparatively, Chinese crude steel production fell 4.4% y-o-y in 2025 to 960.8mt, with December output down 10.3% y-o-y. Similarly, output in other mature steelmaking economies also weakened, reflecting subdued construction activity, weaker demand and ongoing destocking across developed markets.
India’s divergence is therefore structural rather than cyclical. Domestic steel demand continues to be anchored by infrastructure and construction, with sustained activity across roads, railways, metro systems and public housing. Government-led capital expenditure has provided a stable base load of steel consumption, while private-sector investment has remained sufficient to absorb incremental capacity additions.
Growth has also been broad-based. Steel consumption across automotive, machinery, engineering and industrial segments remained resilient through 2025, limiting the volatility typically associated with infrastructure-led demand alone.
Capacity expansion by major producers has further reinforced output growth. New furnaces and downstream capacity ramped up in 2025 and are expected to continue in 2026. This has allowed mills to maintain high utilisation rates without aggressively pushing export volumes into a soft global market.
Policy continued to act as a structural tailwind. Under the National Steel Policy, India is targeting 300 million tonnes/year of installed crude steel capacity by 2030-2031, rising to around 500m t/y by 2047 under the “Viksit Bharat” – Developed India – vision. While these targets remain ambitious, the consistency of production growth over recent years suggests capacity additions are increasingly aligned with underlying demand.
However, risks remain. A sharper slowdown in global growth could eventually indirectly weigh on India’s manufacturing and export-oriented end-user segments, while rapid capacity expansion raises the risk of oversupply if domestic demand softens. Input cost volatility and global trade policy uncertainty also remain notable constraints.
For the near- to mid-term, however, India’s steel sector appears to be operating on a structurally higher growth trajectory than its global peers. The 2025 production data reinforce the view that India is no longer merely offsetting global weakness at the margin, but increasingly reshaping the centre of gravity in global steel demand.
Source:Kallanish
