New Delhi: India’s robust infrastructure, manufacturing, and construction sectors are poised to drive a significant increase in demand for steel, iron ore, coking coal, and scrap in the coming years, according to a report by S&P Global Commodity Insights. This surge is aligned with the government’s ongoing investments and initiatives under the “Make in India” program, emphasizing the country’s commitment to boosting its industrial base and securing essential mineral resources like lithium for its clean energy transition.
Paul Bartholomew, Metals Analytics Lead at S&P Global Commodity Insights, highlighted the government’s strategy to bolster the domestic steel industry. “We would expect the Indian government to continue its policy of supporting the domestic steel industry, which is an important component of [the current Prime Minister] Narendra Modi’s Make in India program,” Bartholomew said. This support is expected to sustain strong steel consumption driven primarily by infrastructural developments.
Despite the rising demand for iron ore domestically and calls from secondary steelmakers for an export ban due to elevated shipments to China and resultant price volatility, the current export policy is expected to remain unchanged. The secondary steelmakers, who often lack integrated operations, face increased costs as they compete for limited supplies or pay higher prices for premium ore.
Furthermore, India is preparing to increase its iron ore production, with plans to enhance the beneficiation process for low-grade ores to improve their quality. This initiative is part of a broader strategy to maintain an adequate supply of raw materials for the steel industry while adhering to environmental standards.
In its pursuit of reducing emissions from the steel sector, India is also focusing on adopting low-carbon technologies such as electric arc furnaces, which utilize scrap as a raw material. This approach not only supports the country’s net-zero goals but also aligns with global environmental objectives.
India’s strategic endeavors extend beyond conventional resources. The nation is actively securing vital minerals for its burgeoning clean energy sector, including lithium, a critical component for electric vehicles and energy storage systems. In 2023, significant lithium ore deposits were discovered in Jammu and Kashmir, although the clay nature of these deposits poses extraction challenges. To bolster its lithium supply, India inked a mining agreement with Argentina in January, enhancing its strategic mineral reserves essential for the energy transition.
As India navigates its political landscape post-elections, the policies adopted will critically determine the trajectory of its critical mineral supply chain development and continued capital expenditure. These factors are set to reinforce India’s growing influence in the global metals and minerals markets, ensuring sustained economic growth and enhanced infrastructural capabilities.