India’s small and medium steel manufacturers are facing mounting challenges as domestic steel prices have fallen to their lowest levels in five years. The decline in prices, coupled with a surge in cheaper imported material, has placed severe pressure on the operational and financial stability of smaller producers across the country.
According to government officials, the current price levels are significantly below sustainable thresholds, making it difficult for small and medium enterprises to maintain profitability. Nearly 150 smaller steel mills have already halted production, while several others are operating at reduced capacity. The prolonged period of depressed prices has also begun to affect employment in steel-producing clusters, with reports of temporary shutdowns and deferred expansion plans.
Industry experts attribute this situation largely to the influx of low-cost steel imports, particularly from neighbouring countries. The sharp rise in imported volumes has disrupted the balance between supply and demand in the domestic market, undercutting local producers who are struggling to compete on price. In contrast, large integrated steel companies are better equipped to absorb the impact due to economies of scale and diversified product portfolios.
The crisis has raised concerns about the future of India’s steel expansion goals. The government has set ambitious targets to scale national steelmaking capacity to 300 million tonnes by 2030 and 500 million tonnes by 2047. However, with smaller units forming a critical part of the value chain, prolonged distress at the grassroots level could slow down this trajectory.
Industry representatives are urging policymakers to consider remedial measures such as import safeguards and financial support for smaller producers. Without timely intervention, the current downturn could lead to consolidation in the sector and a potential loss of regional manufacturing capacity, weakening the overall resilience of India’s steel industry.
