Mumbai: India’s steel consumption rose to 149 million tonnes (mnt) in FY25 and is projected to reach 192 mnt by 2030, growing at a compound annual rate of about 6–7 per cent, according to a new report.

The next phase of growth will be driven not only by infrastructure but also by higher-value steel, cleaner production and better management of price risks, the Multi Commodity Exchange of India Limited (MCX) report said.

Construction and infrastructure currently account for 59 per cent of consumption and are expected to contribute 60–63 per cent of demand by 2030. The report estimates that the infrastructure pipeline could unlock another 25–30 mnt of steel demand as logistics, financing and execution constraints ease.

It also sees an opportunity for Indian producers to close the gap between domestic demand and supply of higher-value steel. “India continues to import some advanced and application-specific grades even as exports remain concentrated in lower-margin products. The specialty steel Production-Linked Incentive scheme is helping bridge this gap, with PLI 1.0–1.2 representing more than Rs 55,000 crore in committed investment,” the findings showed.

The product story is no longer only about volume but about fit-for-purpose output, the report said. It was launched during the Global Commodity Conclave in Mumbai last week. Indian mills are increasingly targeting products for sectors such as renewables, electric vehicles and capital goods, creating scope to raise the value generated from rising steel demand.

India’s growth will also need to be matched by efforts to lower the carbon intensity of steelmaking. The report puts the sector’s emissions intensity at 2.55 tonnes of carbon dioxide per tonne of crude steel, compared with roughly 1.4 tonnes in the United States and about 1.9 tonnes in the European Union.

The share of blast furnace-based production is projected to rise from 42 per cent to 56 per cent by 2030. Measures being pursued to reduce emissions include greater use of renewable energy, improved energy efficiency, higher scrap utilisation, green hydrogen and carbon capture.

The outlook links sustained demand growth with a parallel push toward specialty grades and lower emissions as India scales up steel use through the rest of the decade.