Steel consumption strong despite slower growth

India’s domestic steel consumption is projected to grow at a robust 6.8% CAGR through FY32E, signalling sustained long-term demand even as growth moderates from recent highs, according to a report by Goldman Sachs.  The sector is entering a transition phase after four consecutive years of double-digit expansion, with growth expected to stabilise at 6–7% from FY26E on a higher base.

 The report highlights a structural shift in the steel trade balance, with domestic demand taking precedence over exports. Better realisations in the local market, coupled with firm consumption and global tariff barriers, are likely to curb outbound shipments. Exports are projected to decline at a 5.6% CAGR through FY32E, while imports could rise at 7.8% CAGR as domestic capacity struggles to fully meet rising demand beyond FY30E. Capacity expansion remains steady, with domestic steelmaking capacity expected to grow at around 6% CAGR through FY32E. Utilisation levels are projected to stay strong, sustaining above 80%, reflecting healthy demand conditions. 

Production is expected to accelerate until FY28E as companies ramp up existing facilities, potentially leading to a short-term surplus in flat steel products. Demand dynamics are also evolving, with increased consumption of flat steel driven by sectors such as advanced manufacturing, electric vehicles, and renewable energy infrastructure. While flat products are expected to gain share, long products will continue to dominate, accounting for around 55% of total consumption by FY32E. 

The National Infrastructure Pipeline, estimated at $2.7 trillion, alongside rising investment levels and manufacturing expansion, is expected to drive sustained steel demand.