Key Takeaways:

• ​Indian Railways is the largest institutional consumer of steel in India.
  
• Stainless steel and other metals like aluminum and copper are increasingly used for efficiency and durability.
  
• ₹2.4 lakh crore was allocated by Indian Railways in FY25, much of it for steel-intensive projects.
  
• Projects like the Amrit Bharat Station Scheme and Dedicated Freight Corridors are heavily reliant on steel.

Introduction

As of September 2025, Indian Railways remains the largest institutional consumer of steel in India and continues to be an important consumer of steel in the consumption landscape of India. In comparison to the construction sector, which is the largest consumer overall, Indian Railways remains the largest institutional consumer due to its extensive need for unique infrastructure and rolling stock.

Railways Driving Steel Demand

The growth of Indian Railways is driving steel consumption in India. In 2025, Indian Railways is upgrading its system, expanding tracks, and introducing new routes. It is impossible to undertake such a huge overhaul without steel - steel for new tracks, steel for more railway bridges, steel for train coaches, steel for goods wagons, and steel for train station buildings.

The government has earmarked ₹1.046 trillion for railway track infrastructure projects in 2024–25, a hefty expenditure that covers new lines, doubling of current lines with improved tracks, track renewal, electrification, and gauge conversions. All the infrastructure projects are extremely steel-intensive, ensuring a steady stream of demand for steel to Indian Railways.

Comprehensive Steel Usage Across Railway Projects

Steel is essential at every level and in every element of Indian Railways projects. Railways — The first steel element is the rail, made of carbon steel , and the rail of the track is the steel element that takes the greatest amount of stress. The quantity of rails used alone will represent a strong demand on total steel use.

• Bridges and Elevated Corridors — Structural steel is important for bridges spanning rivers and valleys, as well as for the elevated sections of urban corridors and metro systems.
• Rolling Stock — Modern equipment coaches and wagons increasingly use a greater percentage of stainless steel. This is due to the strength and corrosion resistance , and the reduction of maintenance needed. For example, the Vande Bharat express trains and metro trains are made of stainless steel.
• Electrification Infrastructure — The support masts and poles for overhead catenary system gantries are made of steel and are considered electrification infrastructure. The electric system is essential to the railway's continued use of cleaner energy.
• Station Redevelopment — Station buildings, footbridges, SIS, bus, and taxi passenger amenities all include the use of steel in the material to expedite construction durability. Steel is used throughout Indian Railways.

The reality that many layers of steel are included within each tier illustrates the relation between rail systems development and steel usage. Meanwhile, Indian Railways' growing freight movement—up 22% YoY in August 2025—is not only consuming steel but also transporting steel, making it doubly important to the industry.

Steel Consumption by Indian Railways

FY 25 (April 2024 – March 2025)

• Capital Expenditure: Approximately ₹2.4 lakh crore allocated by Indian Railways was for capital investment, a fair portion of which would be allocated towards steel-centric projects, including track laying, electrification, and station redevelopment.
• Steel Consumption: Although definitive steel consumption figures are not publicly available, the extensive infrastructure projects being undertaken demonstrate considerable needs for steel.

FY 26 (April – August 2025)

The momentum sustained into FY 26 with ongoing investments under flagship initiatives:

• Amrit Bharat Station Scheme: This is the modernization and redevelopment of over 1,000 stations in India, underlining passenger facilities and smart infrastructure, and is dependent on steel for the modernization and building process.
• PM Gati Shakti Master Plan: This is a comprehensive national infrastructure initiative that enhances multimodal connectivity, with Indian Railways serving as a key player and introducing various steel components into new corridors and logistics hubs.
• Dedicated Freight Corridors (DFC): High-quality rails and steel structures are a vital requirement for dedicated freight corridors built for moving heavier freight loads at higher speeds.

These programs support continued high steel consumption, fostering steady demand growth.

Metals Beyond Steel: Diversifying Indian Railways’ Material Use

While steel remains the primary metal for train construction, metals other than steel are being used by Indian Railways to enhance performance, efficiency, and sustainability:

• Aluminum: Aluminum is now being used to manufacture an increasing number of freight wagons; these weigh about 180 tonnes less than steel wagons, allowing for heavier payloads (5-10% more) and less energy usage on routes that experience less wear on the tracks and rolling stock, and improved operational efficiency.
• Stainless Steel: Stainless steel (e.g., '201LN') has become common in new designs for coaches and metro trains, providing a greater strength-to-weight ratio, corrosion resistance , and a longer lifespan for lower lifecycle costs and greater energy efficiency in rolling stock.
• Copper: Copper provides excellent conductivity and is the primary component of overhead wires and electric traction systems, and is also used for wiring in locomotives for electrification.
• Lead: Lead is used mainly in batteries to control signaling systems and for backup power so that safety and operations can continue.
• Zinc: Zinc is typically applied through galvanization as a pre-treatment before painting to improve steel's strength to overcome corrosion; its strengths are great in coastal and humid environments.

By providing several metals, Indian Railways is positioned to improve and innovate the performance of both infrastructure and rolling stock.

Rolling Stock Modernization and Stainless-Steel Demand

The Indian Railways are now using greater amounts of stainless steel than ever, with the introduction of the contemporary Vande Bharat Train and improved LHB coaches. The advantages of stainless steel relate to its durability, corrosion resistance , and ease of maintenance. Currently, it is a major contributor to Indian stainless-steel consumption and has played a clear role in the significant growth of this segment.

Stainless steel consumption reached 4.8 million tonnes in FY 2025, representing an 84% increase over the past 5 years. A significant portion of this increase is due to the greater incidence of stainless-steel usage inside railway coaches, metro cars, and wagons, and in station architecture. 

Economic Impact: Steel and Railways

The partnership of Indian Railways and the steel industry is vital to India's economic goals:

• In the aggregate, India is estimating a crude steel capacity of 300 million tonnes (MT) as capacity (meaning excess production) by 2030, with stable demands by the railways being a major contributor toward reaching such capacity.
• Predictable and stable demands mean steel plants will be operating at or near full capacity levels, which generates predictable revenues while driving investment in foresight steel-making technologies.
• Indian Railways fosters the use of advanced steel grades, including:
  •  High Strength Low Alloy (HSLA) Steel is used in structural applications.
  • Weathering Steel is used in bridges and infrastructure for corrosion resistance .
  • Corrosion-resistant stainless Steel is used in rolling stock and architecture.

This enhances innovation and sustainability within the steel industry.

Conclusion:

In the coming years, namely FY 2025-26, Indian Railways will continue to be one of the largest contributors to steel demand across India. As the country embarks on its infrastructure aspirations, such as support for urban metro expansion, semi-high-speed corridor rollouts, dedicated freight corridors, and station redevelopment, steel demand will also trend consistently higher. This predictable and sustained demand from Indian Railways is important for India’s steel industry. It is a cornerstone to facilitate capacity planning, modernise the industry for technological upgrade, and advance innovation of new steel grades, including High-Strength Low-Alloy (HSLA) steel, and corrosion-resistant stainless steel, which will be required to hit the target of 300 million tonnes of crude steel by 2030. Finally, as India’s economy continues to move towards a $5 trillion economy, the partnership between Railways and steel will remain at the centre of this journey.