India Plans Steel Boost Amid US Tariff Concerns

New Delhi: Amid the US tariff fears, the government is mulling various steps to boost the steel sector, including innovative new technologies and practices, more production-linked incentives or PLI schemes for steel producers to increase capacity, duty cut in imports and exports, increasing consumption demand and offering a wide range of steel products, catering to various industries among others.

The move of the government comes after the announcement of the US tariffs of about 25 per cent on steel and aluminium imports, effective from March 12, which have raised Indian exporters’ concerns about declining orders and rising costs. “The government is reviewing all the export-oriented countries as well as taking stock of the situation and initiating various policy measures to bring more nations into the board, aiming to boost exports of Indian steel in these countries,” a top ministry source said.

As India is the world’s second-largest steel producer, with major players including Tata Steel, JSW Steel, and Steel Authority of India Limited (SAIL), its steel sector has shown strong growth, with crude steel production reaching 36.61 million tonnes (MT) in the first quarter of FY25, surpassing previous levels. Indian steel companies are significant exporters, with products being shipped to over 100 countries.

Highlighting India’s emergence as a global steel demand hub, Sandeep Poundrik, secretary, ministry of steel, has projected per capita consumption to rise from 100 kg to 158 kg before 2030. “There are key challenges, including plant efficiency, artificial intelligence and machine learning adoption, digitisation, and decarbonisation, stressing the need for research tailored to India’s unique industry structure, where 45 percent of capacity lies in the secondary steel sector,” said Poundrik.

The government has underscored the importance for the manufacturing in the steel sector and its push for making India self-reliant and a major global manufacturing hub in the world. For the PLI scheme in speciality steel, the government also said that outlay increased 6 times from Rs 55 crore in FY25 in the revised estimate (RE) to Rs 305 crore in FY26 budget estimate (BE).

Last week, the government also launched a unique initiative — Steel Research Technology Mission of India (SRTMI), a joint initiative of the Indian steel industry and academia to promote growth in the industry. The government, however, offered three schemes in the steel industry, which will identify and solve the critical sector with wide challenges of national interest, support open research proposals from academia and researchers in collaboration with industry and help early-stage start-ups to develop cutting-edge steel technologies.

As per EEPC data, India’s exports of engineering goods to the U.S. jumped 18 per cent year-on-year in January to $1.62 billion, outpacing the sector’s overall growth of 7.44 per cent ahead of the tariffs. “From April 2024 to January 2025, the first 10 months of the fiscal year, engineering exports to the U.S. rose by an annual 9 per cent to $15.6 billion, driven by an increase in shipments of aircraft parts, electrical machinery, automobiles, industrial machinery and medical instruments.