Government’s Infrastructure Push to Boost Steel Demand

The Indian government’s emphasis on infrastructure development is set to significantly enhance steel demand. In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced a 10.08 per cent increase in capital expenditure, raising the allocation to a record ₹11.21 lakh crore. This investment, constituting 3.1 per cent of the GDP, aims to stimulate economic growth through extensive public spending on infrastructure projects. 

Complementing this, the government unveiled the second Asset Monetisation Plan for 2025-30, targeting ₹10 lakh crore by monetizing government-owned assets. The proceeds will be reinvested into new infrastructure projects, further bolstering sectors like steel that are integral to construction and development activities. 

Additionally, the steel industry is poised to benefit from the government’s support for Micro, Small, and Medium Enterprises (MSMEs). Initiatives such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provide collateral-free credit to MSMEs, facilitating their participation in infrastructure projects and, consequently, increasing steel consumption. 

These strategic measures align with India’s ambitious goal of achieving 300 million tonnes of steel production by 2030, necessitating substantial investment and demand stimulation.