India is currently the world’s second largest producer of crude steel producing 118.20 mt. The country is the largest producer of direct reduced iron (DRI) or sponge iron in the world (January-December 2021), producing 39.04 mt of sponge iron, with a growth rate of 16.2 per cent over the corresponding period last year. India is also the 2nd largest consumer of finished steel in 2021 (106.23 mt), preceded by China as the largest steel consumer, as per the World Steel Association. Capacity for domestic crude steel expanded from 137.97 mt in 2017-18 to 154.06 mt in 2021-22, with a CAGR of 3.7 per cent during the five-year period. Production of steel could go up to 500 mt by 2050, nearly four times the current output.

Steel has traditionally occupied a top spot among metals and is seen as a measure of the country’s economic development because it is both a raw material and an intermediary product. The Indian steel industry is classified into three categories: major producers, main producers and secondary producers. Growth in the Indian steel sector is driven by the domestic availability of raw materials such as iron ore and cost-effective labour.