India, ranking as the world's second-largest crude steel producer, experienced rapid growth in steel demand thanks to consistent government expenditure on infrastructure projects, positioning itself as one of the globally fastest-growing markets for the alloy, despite a slowdown in global demand.

Projections indicate that steel demand will witness a more moderate increase of 7%-10% in the fiscal year 2024-25, a slower pace compared to the anticipated growth of 11%-12% in the current year until March 2024, as outlined by industry experts and analysts.

With Prime Minister Narendra Modi's Bharatiya Janata Party vying for a third term in the forthcoming early 2024 general elections, the election process in India, known as the world's largest democratic exercise, spans weeks due to staggered voting.

Fitch Ratings forecasts a 9% rise in finished steel consumption in India for FY25, following a 12% increase in FY24. Despite this, India is expected to maintain its position as the primary global growth market for steel.

The construction sector, a pivotal driver of India's steel market, experienced robust growth, posting a 13.3% year-on-year expansion in the July-September quarter. However, analysts, such as Puneet Paliwal from London-based CRU Group, anticipate a slowdown in government capital expenditure-driven steel demand growth in 2024, particularly in the first half of the year.

Despite reaching a five-year high in finished steel consumption between April and October, India has witnessed a surge in steel imports, reaching a four-year peak. Industry officials have expressed concerns about higher raw material costs, and the combination of increased imports and slower demand is anticipated to exacerbate challenges faced by India's steel mills. The government, while acknowledging the rise in imports, has indicated a commitment to monitoring the situation.