Indian steelmakers to begin multi-year capex cycle as capacity target rises to 300 mt: S&P Global

NEW DELHI: Indian steelmakers are set to enter a multi-year investment cycle as the country targets expanding its steel-making capacity to 300 million tonnes by 2030, according to a report by S&P Global.

The country’s top four listed steel producers have announced a 40 per cent year-on-year increase in aggregate capital expenditure (capex) for fiscal 2027 (ending March 31), representing an investment of Rs 700 billion, which is up from Rs 500 billion in fiscal 2026.

“This is the start of a multi-year capex cycle as India aims to increase steel capacity to 300 million ton by 2030. The top four account for half of the country’s steel output,” the report said.

The investment push is being driven by strong domestic demand. India’s finished steel consumption stood at 165 million tonnes in fiscal 2026, and S&P Global expects annual steel consumption to increase by more than 50 million tonnes over the next five years.

The capacity expansion is also being supported by trade protection measures. “The capacity addition comes at a time when the local producers face reduced competition from low-priced overseas supply, as safeguard duties continue to curb cheaper imports,” it said.

Introduced provisionally in April 2025, the 11 per cent -12 per cent, duties on steel imports were extended through April 2028 in early 2026, it noted. According to S&P Global, sector-wide earnings are rising in the Indian steel industry, supported by firm domestic steel prices and healthy demand.

Stressing on the geopolitical conflict, the report noted, “While in the Middle East introduces second-order effects, primarily through higher freight and elevated energy costs, resilient steel prices should offset the impact on profit margins”.

However, Indian steel companies are “well-positioned to absorb heavy capital outlays,” and “capital investments will likely stay elevated beyond fiscal 2027”, as per S&P Global “India aims to expand total steel capacity from 220 million tons to 300 million tons by 2030. This would entail an annual capital outlay of about USD 15 billion over the next five years.”

Meanwhile, the report notes that “given the significant capacity additions, any prolonged weakness in domestic demand would be a key risk. The resulting overcapacity could put pressure on steel prices and earnings”. (ANI)