National infrastructure push and steel demand
India’s government has significantly ramped up infrastructure spending. For FY2025-26, central capital outlay is ₹11.2 lakh crore (US$129 bn), about 10% higher than FY2024-25. Key schemes like the National Infrastructure Pipeline (NIP, ₹111 lakh crore) and PM Gati Shakti (an integrated masterplan) coordinate thousands of road, rail, port and urban projects. Building and infrastructure projects in India consume roughly 69% of the country’s steel, so these programs directly boost domestic steel demand and production
Regional infrastructure investment and steel demand
Spending is uneven across regions, shaping local markets. In India’s North-East, infrastructure drives steel demand. The Ministry of Steel notes that infrastructure projects—such as roads, bridges, and railways—primarily drive the region’s steel consumption. Governments have backed this with heavy budgets; for example, they plan to develop ₹77,000 cr worth of new railway projects and over 16,200 km of highways in the Northeast by 2025, which will significantly increase steel usage despite the region’s minimal local production. By contrast, western and southern states like Maharashtra and Gujarat are major consuming hubs. Maharashtra – India’s 4th-largest steelmaking state – produced about 16.5 Mt of steel in FY25, and its metro lines, expressways and ports create huge local demand. Both homegrown mills and suppliers from core producing regions supply steel for these projects.
Key projects and steel usage
Flagship infrastructure projects highlight the scale of demand. The Delhi–Mumbai Expressway (1,380 km) alone is expected to use over 1.2 million tonnes of steel, affecting construction across six states. Urban transit corridors are similarly steel-intensive – typically ~5,000–10,000 t of steel per km of track. Overall, national programmes amplify these demands: official analysis shows India’s Bharatmala highway scheme could need ~18–20 Mt of steel, and Sagarmala port modernisation ~13–15 Mt. These projects concentrate demand in their regions while drawing supplies from major steel hubs (Odisha, Jharkhand, Chhattisgarh, Karnataka, etc.) via improved freight networks.
Price and distribution effects
Infrastructure-led demand also influences steel prices and distribution. Industry analysts note that past capex spurts acted as a “shock absorber” for domestic steel, insulating it from low-cost imports. Conversely, when growth slowed in 2024 a flood of Chinese/Vietnamese imports drove domestic prices to three-year lows. Most observers now expect a rebound: Tata Steel’s CEO predicts demand will strengthen from late 2024, led by construction, automotive and railway sectors. Supply chains are adapting too – for example, RINL’s Visakhapatnam plant dispatched ~1,400 MT to North-East highway/bridge projects by Dec 2024. Overall, targeted infrastructure spending is reshaping India’s regional steel consumption, production and pricing patterns.
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