Domestic steel consumption in India is projected to grow at a compound annual growth rate (CAGR) of approximately 6.8 per cent through to FY32E compared to the levels recorded in FY23.
According to a report by Goldman Sachs, the industry is transitioning after a period of rapid acceleration. The report noted that following four successive years of double-digit growth in steel consumption, growth is expected to moderate to 6-7 per cent from FY26E on a higher base.
“We expect domestic steel consumption to grow at a ~6.8 percent CAGR through to FY32E compared to the FY23 level. Following four successive years of double-digit growth in steel consumption, we expect growth to moderate to 6-7 percent from FY26E on a higher base,” the report stated.
The trade balance for the sector is also expected to shift as domestic requirements take precedence over international sales. The report mentioned that the domestic market will offer better realization for producers, which, coupled with firm local demand and global tariff barriers, will weigh on outbound shipments.
“We expect exports to come off progressively due to better realization in the domestic market, firm demand and tariff barriers worldwide. We expect imports on the other hand to go up post FY30E as announced domestic capacities might not be enough to cater to the domestic demand. As a result, we expect exports to fall by a 5.6 percent CAGR while imports are likely to increase at a 7.8 percent CAGR from FY23-FY32E,” the report said.
While domestic capacity is forecasted to grow by a 6 per cent CAGR through to FY32E, the utilization of these facilities is expected to remain high. Based on the announced capacities by various market players, utilization rates are likely to sustain above 80 per cent through the beginning of the next decade.
Production in this category is expected to pick up through to FY28E as companies ramp up their existing capacities. This increase in supply may lead to a slight surplus of flat products in the short term.
“We expect consumption of flats to increase progressively as the economy grows since these are used in high-end construction, advanced manufacturing sectors such as EVs and renewable power infrastructure. As a result, we expect the share of flats consumption in India to increase by 70bps by FY32E compared to FY23. That said, we still expect longs to play a dominant role, accounting for 55 percent share in product mix by FY32E,” the report added.
The report highlighted that much of this demand is underpinned by the government’s infrastructure objectives. The National Infrastructure Pipeline stands at USD 2.7 trillion as of February 2026, with a concentrated focus on railways, highways, ports, aviation, and metro rail projects. These initiatives are part of a broader strategy to transform India into a developed nation by 2047.
“As per the NSO’s first advance estimates published in Jan’26, investment as a share of Indian GDP is expected to rise to 33.8 percent in FY26E. The share of manufacturing in GDP is likely to increase to 25 percent by CY47 compared to 17 percent currently. This would boost steel demand further,” the report stated.
