Finance Minister Nirmala Sitharaman, addressing domestic steel industry representatives on Monday, called on the sector to reduce carbon output and expand its capacity for specialty and high-grade steel varieties, with the aim of reducing the country's reliance on imported supply.
Speaking before the World Steel Association General Assembly, Sitharaman drew attention to a government-backed incentive programme tied to specialty steel production, carrying an approved budget of ₹6,300 crore under the production-linked incentive framework. The programme is directed at boosting domestic manufacturing output and encouraging producers to adopt newer technologies, with the broader objective of meeting domestic demand for specialised steel grades that the home market has not been able to supply independently.
Sitharaman presented India's steel sector as following a path that diverged from the overcapacity and softening demand affecting much of the global industry. Home demand and ongoing capital investment have underpinned activity in India's steel sector, she noted, adding that steel consumption had outpaced domestic output across each of the two most recent years — a pattern she described as evidence of the market's underlying depth and scope for further expansion.
With per-capita steel use running at roughly 109 kg — approximately half the worldwide figure of 209 kg — room for further growth in domestic demand exists, she noted.
Sitharaman attributed steel demand growth to the government's ongoing programme of public capital investment. Federal infrastructure spending has climbed roughly six times over, moving from around ₹2 lakh crore in the 2014-15 fiscal year to a projected ₹12.2 lakh crore by FY27. Roughly two-thirds of India's total steel demand is driven by the building and infrastructure sectors, and elevated government spending in those areas bolsters appetite for the metal, she noted.
Government-directed infrastructure outlays, Sitharaman argued, provide domestic steel manufacturers with a dependable local demand base along with the confidence to pursue capacity growth and facility modernisation.
Sitharaman laid out five areas of focus for the steel sector, ranging from cutting the energy and carbon footprint of production through to building out capacity in line with the country's development requirements. Boosting domestic output of specialty and high-grade steel, she argued, would support key industries while reducing the country's dependence on niche imported materials.
Decarbonisation at a pace aligned with the country's development goals was among the positions she put forward. Three conditions underpinned her argument: that emissions be tracked with verifiable accuracy, that new technology be developed, and that the financial burden of transitioning away from existing systems be distributed equitably.
On trade policy, Sitharaman argued that imposing successive unilateral tariffs displaces surplus steel into other markets rather than addressing the structural imbalance at its source. Resolving the worldwide glut of overcapacity over the long term, she contended, hinges on coordinated international rules governing the subsidies that sustain unprofitable production, backed by data that all parties can verify.
In her address to World Steel Association delegates, she described India's steel sector as the world's most rapidly expanding, pointing to state-backed infrastructure spending and an established framework for greener production methods.
At the meeting with the World Steel Association, Sitharaman put forward the idea of the body opening a permanent office in India, pointing to the country's standing as the single largest source of new steel consumption growth worldwide. She noted that the association's Beijing presence dates to 2006, a period when Chinese demand was a principal engine of expansion across the global steel market. Expanding the organisation's footprint in India, she said, would place it closer to a market where demand growth, new technology, and industrial activity are all advancing.
Sitharaman noted that establishing a presence in India could also position the association to build stronger ties with the expanding steel markets of South Asia, Southeast Asia, West Asia, and Africa — regions where India has maintained commercial relationships over many years.
