India's steel industry experienced a positive trajectory in the first five months of FY2025-26. This momentum was assisted by strong domestic steel demand and production, with some recovery in reported exports. Steel consumption grew by 8.2%, underpinned by demand related to infrastructure, construction, and the auto sector. Production mirrored demand, with crude steel and finished steel production up by 11.6% and 10.2% respectively. This shows that supply is keeping up with demand, and there is no shortfall or spike in prices.

Along with it, India's finished steel exports also increased by 8.9% m-o-m from 0.485 million tonnes in July 2025 to 0.528 million tonnes in August 2025. On a y-o-y basis, exports were up by 53.9% from 0.343 million tonnes in August 2024. Cumulative exports from April-August 2025 reached 2.226 million tonnes, up 16.2% from last year, when they stood at 1.915 million tonnes. Exports increased due to stronger global demand, while Indian steel prices were competitive because of lower input costs. In August, imports increased by 47% m-o-m, which was most likely due to stockpiling, short-term price movements, or demand pick-up. However, overall imports remained lower on a y-o-y basis, indicating the end-user and producer acceptance of lower-priced steel domestically and reduced reliance on importing it.

The raw materials cost also dropped, enabling producers to lower prices without compromising the profit margins. Steel prices also dropped slightly in July, making Indian steel even more globally competitive. Both public and private sectors produced well with rising production and sales.

Outlook:

Domestic steel consumption will continue to exhibit good strength in the near term on the back of ongoing post-monsoon construction activity, solid automobile sales, and government expenditure on infrastructure projects. Exports are likely to increase further as Indian steel remains competitive on the cost front with lower input prices and steady production. Despite imports increasing sharply in August, the rate of imports should subside with adequate domestic availability to meet market needs. Steel prices, which recently dropped due to declining raw material prices, will generally stay the same or see a slight increase if demand picks up due to seasonality around the festive season. Overall, India's steel sector is well-positioned for stable and moderated growth sustained by optimism around strong demand fundamentals and a conducive market environment.