India’s Steel Production has grown from 22 million tonne in 1992 to 152 million tonne in 2024-25, with 44 million tonne of consumption growth, in the last three years alone.

Alok Sahay, Secretary General, Indian Steel Association, while speaking at a recent steel event in New York, mentioned, “India currently faces significant trade challenges. There has been a 104 per cent increase in steel imports and a 64 per cen decline in exports due to the evolving global trade dynamics, with approximately 500 million tonne of surplus steel capacity among the neighbouring major Asian producers. India remains vulnerable to import pressures, especially as other major steel-consuming nations have adopted protective trade measures.”

Total scrap availability in India has remained around 25-30 MT over the past five years. While the country produces nearly 25 million tonne of scrap, it imports nearly 9 million tonne. Currently, scrap contributes around 30-35 per cent of India’s overall steel production. 

Scrap consumption in India from FY 2018 to FY 2024, Ministry of Steel (Green, 2024)

The steel scrap sector is poised to grow at a CAGR of 15-20% over the next 10-12 years, says Ritesh Maheshwari, Executive Director, Sbarro Metallic. He adds, “Scrap continues to be a critical raw material in steel production. However, in recent months, there has been a slight decline in domestic scrap consumption. This is largely due to increased imports of semi-finished products such as billets, slabs, and long products, as well as the extensive use of Nickel Pig Iron (NPI) from Indonesia, in stainless steel production. While overall steel production is growing, the share of scrap-based production is under pressure as imported alternatives are reducing the demand for domestic scrap melting.”

Rajiv Thakur, President, Fortan Steel, says that around 50% of India’s scrap is imported. Top suppliers of scrap steel to India include EU, US and UK.

Recent global developments

Globally, the availability of scrap for trade is expected to tighten significantly as major exporting countries increasingly prioritise domestic consumption. As nations begin to recognise scrap as a strategic resource, India must move swiftly towards self-reliance in scrap generation and processing to ensure long-term availability, says Maheshwari. 

According to Boston Consulting Group (BCG), global steel scrap trade will decrease by 15% from 110 million tonne to 93 million tonne by 2030.

According to Thakur, India’s stainless steel sector is facing mounting challenges due to global disruptions and aggressive trade practices. He lists:

US tariffs

• Post-April, there is uncertainty around the US tariff policy, with vague implementation and an evolving regulatory environment.
• This has affected India’s stainless steel export competitiveness.

China’s steel dumping

• China produces over 1 billion tonne of steel annually, compared to India’s 150-170 million tonne.
• With falling domestic demand (due to a slowdown in infrastructure), China is flooding global markets with low-priced steel, often $50–100 per tonne cheaper than Indian products.
• Chinese steel quality has improved significantly, matching international standards.
• Superior logistics, customer service, and cost efficiency give China an edge.

Supply chain and logistics challenges

• India’s logistics cost is 10-15% of material value, vs. 5-6% in China.
• Geopolitical disruptions are impacting global shipping routes.
• India’s freight corridors have improved but still face high transit times, especially for landlocked states.

EU’s CABM impact!

India faces challenges due to high carbon emissions in steel production, averaging 2.55 tonne of CO₂ per tonne of steel plate, Thakur highlights, adding, “This makes Indian exports vulnerable under the EU’s Carbon Border Adjustment Mechanism (CBAM), which requires detailed carbon emission disclosures.

He emphasises that while CBAM may restrict exports to Europe initially, India is actively pursuing trade agreements to ease such barriers. A Free Trade Agreement (FTA) with the UK has already been signed, and negotiations with EFTA (including Norway and other European nations) are underway. Once these FTAs are finalised – potentially by year-end – it is expected that CBAM restrictions could be relaxed, opening greater access for Indian steel exports to Europe.

Maheshwari noted that CBAM and other global compliance norms will significantly impact the Indian recycling and scrap ecosystem. Genuine recyclers and scrap processors must upgrade their systems to meet new environmental and traceability standards. This shift is likely to benefit the organised sector, while limiting the influence of unorganised and informal players.

Measures to boost scrap shortfall 

Domestic availability of scrap is steadily improving, with active efforts from the industry, notes Maheshwari. To accelerate growth in the scrap recycling sector, we seek greater support from the government in facilitating access to essential equipment, land, and resources. A more proactive policy approach, including streamlined processes and single-window clearances, is critical to attracting wider participation and investment in this emerging sector.

Thakur emphasises that the vehicle scrap policy, if effectively implemented, has the potential to significantly enhance the availability of steel scrap. It remains the most critical enabler in strengthening domestic scrap supply – other measures are secondary in comparison.

Recycling ecosystem

The development of a robust recycling ecosystem in India is only partially underway, and there are structural reasons behind this. 

According to Maheshwari, India’s emergence as a significant player on the global steel production map has occurred primarily over the last 15-30 years. Much of the steel used in infrastructure and housing during this period is still in use, and it will take another 15-20 years before a substantial volume of it re-enters the recycling cycle.

In Thakur’s view, India’s current recycling system is not yet equipped to fully meet the growing demand for stainless steel production. At present, the country has an installed stainless steel production capacity of approximately 7 million tonne, operating at around 60% capacity utilisation. This translates to about 4.5 million tonne of domestic production, with an additional 1 million tonne being imported from countries such as China, South Korea, Japan, Vietnam, and Indonesia.

India has set an ambitious target of reaching 300 million tonne of stainless steel production by 2030. To realise this vision, the availability of quality steel scrap will be critical. This, in turn, requires the development of an efficient and large-scale recycling ecosystem.

Currently, recycling levels are limited – only about 30–40% of scrap is being effectively recovered and reused. Without strengthening the domestic recycling infrastructure and policies, achieving our production targets will be extremely challenging.

Policy support

The mandatory usage of recycled steel would support scrap generation, says Maheshwari.

According to Thakur, the current government policy for scrap recovery must be strengthened through significantly more attractive incentives. At present, most vehicle owners are reluctant to scrap their 15-year-old passenger vehicles or 10-year-old commercial vehicles. Unless a compelling incentive is offered to new buyers – the policy will remain ineffective. He emphasises three key factors critical to the success of the initiative: 

1. Substantial benefits for new vehicle buyers to encourage scrapping of old vehicles, 
2. Rigorous implementation to ensure that unfit older vehicles are removed from the roads, and a consistent policy framework across all states. 
3. The relocation of unfit vehicles to smaller towns defeats the purpose of the scrap policy.

According to a report on ‘Greening the Steel Sector in India’, supported by the Ministry of Steel, the ministry may support the industry in overcoming challenges by establishing circular economy parks and recycling zones, incorporating Extended Producer Responsibility (EPR) and integrating the informal sector by granting industry status to the recycling sector and developing an e-marketplace for the unorganised sector. Further, the Ministry of Steel may work with various Ministries to provide financial support and incentives for vehicle scrappage policies to incentivise the adoption of BATs in the recycling sector.

Green steel

As per the Ministry of Steel’s report, to support the steel sector’s transition to low-emission carbon steel, the Government of India has identified three foundational pillars and 14 strategic levers to drive this transformation.

Ministry of Steel (Greening the Steel Sector in India, 2024), Roadmap for Net Zero Transition in India 

According to Thakur, Initially, the government imposed an import duty on scrap, but this was later withdrawn. To reduce reliance on imports and boost domestic scrap availability, India must strengthen its recycling ecosystem.

Vehicles contain a significant portion (60%) of steel, and end-of-life vehicles are a major source of recyclable steel. Proper vehicle scrappage reduces waste and promotes resource efficiency.

To enable this, there is a strong need to establish well-equipped scrap yards in all major cities, especially those near steel plants. Establishing decentralised scrapyards close to production centers ensures reduced transportation emissions, localised recycling, and employment generation. 

Maheshwari points out that the stainless steel sector continues to be heavily dependent on scrap as a primary raw material. However, due to limited domestic scrap availability and the high cost of imports, the industry has increasingly turned to alternatives like Nickel Pig Iron (NPI) – despite its lower environmental credentials. While these alternatives help bridge supply gaps, they are not aligned with long-term sustainability goals.

Scrap remains central to stainless steel production, and industry players firmly recognise its role in supporting green steelmaking and decarbonisation. All major producers are committed to increasing scrap usage in line with environmental standards, as part of their efforts to transition towards decarbonisation and green steel.