India’s Steel Industry to Expand by 23 Million Tonnes by 2027
India’s steel industry is on track for significant growth, with plans to add approximately 23 million tonnes of crude steel capacity between FY24 and FY27. This expansion reflects a compound annual growth rate (CAGR) of 4.8%, consistent with the industry’s long-term average growth from FY15 to FY24.
Key Players in Expansion
Major steel companies such as JSW, JSPL, Tata Steel, and ArcelorMittal & Nippon Steel are expected to account for nearly 87% of this capacity expansion. JSW Steel plans to add 7 million tonnes by FY28, while JSPL aims for 6.3 million tonnes by FY27.
Supply and Demand Dynamics
Despite the increase in capacity, demand is projected to grow at a 6% CAGR through FY27, potentially outpacing supply. This could improve the domestic supply-demand balance, reducing the need for exports.
Competitive Advantages
India’s steel companies benefit from low labor costs and competitive iron ore prices, positioning them well in the global market. The expansion will primarily focus on brownfield projects, enhancing existing facilities.
Global Positioning
With strong domestic demand and competitive advantages, Indian steel companies are among the best-positioned globally, offering significant growth potential in the coming years.
Doubts Revealed
Steel Industry -: The steel industry involves the production and manufacturing of steel, which is a strong metal used in building things like bridges, cars, and buildings.
Million Tonnes -: A tonne is a unit of weight. One million tonnes is a very large amount, like the weight of many elephants combined.
FY24 to FY27 -: FY stands for Fiscal Year, which is a year as reckoned for taxing or accounting purposes. FY24 to FY27 means from the year 2024 to 2027.
Compound Annual Growth Rate -: This is a way to calculate how much something grows each year over a period of time. A 4.8% growth rate means the steel industry is expected to grow by that percentage each year.
JSW, JSPL, Tata Steel, ArcelorMittal & Nippon Steel -: These are big companies that make steel. They are well-known in India and around the world for producing a lot of steel.
Exports -: Exports are goods sent from one country to another. If India relies less on exports, it means they will use more steel within the country instead of sending it abroad.
Iron Ore -: Iron ore is a type of rock that contains iron. It is used to make steel, and having it at a low cost helps make steel production cheaper.