India’s steel sector is confronting growing challenges as a surge of low-cost imports continues to erode domestic competitiveness and strain capacity utilisation. The steady inflow of cheaper steel from overseas markets has created an oversupply situation, forcing several local producers to scale down operations or temporarily suspend production.
Industry reports indicate that around 150 small and medium-sized mills have already ceased operations, while nearly 50 others have curtailed output due to weakening margins. The influx of imported steel, primarily from countries with lower production costs, has intensified price pressures in the domestic market, leaving local manufacturers struggling to sustain profitability. Larger integrated players have managed to withstand the impact to some extent, but smaller mills, which form the backbone of India’s regional steel supply, are facing mounting distress.
These market conditions are threatening to derail India’s ambitious expansion roadmap for the steel industry. The government’s vision aims to raise the country’s crude steelmaking capacity to 300 million tonnes by 2030 and further to 500 million tonnes by 2047. However, the prolonged slump in domestic demand and the growing dominance of imported steel could slow investment momentum and disrupt this growth trajectory.
Analysts warn that without timely policy intervention; the ongoing imbalance could undermine the viability of several expansion projects. Measures such as anti-dumping duties, import monitoring, and support for local producers are being discussed as possible safeguards. Industry stakeholders also highlight the need to strengthen domestic infrastructure spending and promote the use of locally produced steel to counter external competition.
The surge in imports serves as a reminder of the vulnerability of India’s steel sector to global price fluctuations. Unless corrective steps are taken soon, the combination of low prices and subdued capacity utilisation could jeopardise the country’s long-term ambitions of becoming a global steel powerhouse.
