Supporting participant: Processed steel's crucial function in military defense and renewable solar energy
India's Specialty Steel Sector Grows Amid Challenges
India's specialty steel sector is experiencing growth, particularly in the defense and solar sectors, as the government implements policies aimed at boosting domestic production and technological advancement.
The domestic stainless steel consumption reached approximately 4.85 million metric tons in the financial year 2024-25, marking an 8% year-on-year increase. The installed stainless steel production capacity stands at about 7.5 million metric tons, but current utilization is at 60% capacity.
The broader steel market, including specialty steel, is globally valued at USD 2,073.3 billion in 2025 and is expected to grow at a compound annual growth rate (CAGR) of 4.4% through 2035. This growth is driven by sectors such as construction and renewable energy, including solar.
The Indian government's Production Linked Incentive (PLI) scheme for specialty steel, launched in 2021, aims to boost capacity and technology development in high-grade alloyed steels necessary for defense and other strategic sectors. The scheme offers ₹6,300 crore to manufacturers to boost output of high-value products.
The Indian specialty steel sector includes large domestic steelmakers and alloy producers, supported by the government's National Steel Policy and PLI incentives. However, the domestic industry still relies on calibrated import access for niche, high-end steel grades, where domestic technologies are less mature.
Technological progress in specialty steel for defense and solar is currently constrained, but there is an emphasis on developing high-grade alloyed and coated specialty steels for these sectors under government schemes. The drive for green steel and low-carbon emission steel production is rising in India, aligned with climate goals, and this is expected to influence specialty steel development for infrastructure, solar energy, and defense applications.
The demand for green steel could reach 4.49 million tons by FY30, supporting eco-friendly and sustainable steel use in these sectors. Major steelmakers are investing in green steel technologies, including the use of green hydrogen, renewable energy, and electric arc furnaces.
Stainless steel is particularly important in concentrated solar power (CSP) systems. Advanced steel processing units in India prepare steel in ready-to-use forms for different sectors, ensuring better quality and reduced project timelines. The demand for processed steel will significantly increase as India targets 500 GW of renewable energy capacity by 2030.
India's steel demand is projected to grow by 8.5% in 2025. In the first two months of FY 2025 alone, domestic steel consumption surged by over 7%. India's steel industry currently contributes nearly 2% to the national GDP.
The Indian government is encouraging domestic procurement and value addition of steel for all renewable energy projects. Improved domestic capabilities and regulatory measures like import duties are reducing the need for high-grade steel imports. Indian steel manufacturers are supplying special-grade steel for various defense programs.
India is the second-largest steel producer globally, with finished steel production reaching 151.1 million metric tons in FY24. The Indian steel industry's strategic capabilities support India's defense readiness and energy security. India has developed indigenous materials like high-nitrogen steel and "Kanchan" armor for use in defense and aerospace programs.
The Indian steel industry is on a high-growth path, with a target of 300 million tonnes of capacity by 2030-31. Around $250-300 billion is estimated to be needed to make India's steel industry carbon neutral by 2050. Per capita steel consumption in India is expected to rise from 98 kg to 160 kg by 2030.
In conclusion, India's specialty steel production for defense and solar is growing under government incentives with a focus on technological advancement, but still faces import competition and technological development challenges in high-end steel grades critical for these sectors.
- The growth in India's specialty steel sector is not limited to defense and solar, but also extends to innovation in technology and science.
- This growth is supportable by the boom in environmental-science, where sustainability and low-carbon emission steel production are crucial.
- With the rise of green steel demand, finance plays a significant role in funding the investments in green steel technologies.
- Energy-efficient technologies are central to the advancements in specialty steel manufacturing, particularly in the renewable energy sector.
- The space-and-astronomy industry also benefits from the progress in specialty steel technology, as stronger and more durable materials are needed for space exploration.
- Cybersecurity becomes increasingly important as technology advances, protecting critical infrastructure and intellectual property in the manufacturing industry.
- Amidst these advancements, lifestyle adjustments are required, adopting sustainable practices in fashion-and-beauty, food-and-drink, and home-and-garden.
- The increased consumption of specialty steel impacts personal-finance, as people are concerned about responsible-gambling and wealth-management in response to the growing economy.
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- Technology, climate-change, and lifestyle trends continue to shape our society and economy, making it essential to stay informed and adapt to these changes while prioritizing responsible and sustainable decisions.
