The India electrical steel market is experiencing robust growth, driven by increasing demand from power infrastructure, electric vehicles (EVs), and industrial applications. As of 2024, the market is estimated to be valued at approximately USD 3.5 billion and is projected to grow at a CAGR of 7-9% over the next five years.
Key factors driving this growth include:
- Expansion of power grid infrastructure to meet rising energy demands.
- Government initiatives in renewable energy and smart grid implementation.
- Rapid growth in electric vehicle (EV) adoption, boosting demand for NGO electrical steel in motors.
- Industrialization and urbanization, leading to increased usage in transformers, motors, and appliances.
Market Segmentation
The Indian electrical steel market is primarily divided into:
- By Type:
- Grain-Oriented Electrical Steel (GOES) – Used in power and distribution transformers.
- Non-Grain-Oriented Electrical Steel (NGOES) – Widely used in electric motors, generators, and industrial equipment.
- By Application:
- Power Generation & Distribution – Transformers, reactors, and substations.
- Automotive & Electric Vehicles – EV traction motors, alternators, and onboard transformers.
- Industrial Machinery – Motors, compressors, and energy-efficient appliances.
- Renewable Energy – Wind turbines, solar inverters, and grid integration.
Key Market Drivers
- Government Policies & Investments
- The National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of Electric Vehicles (FAME) schemes are accelerating EV production.
- PLI (Production Linked Incentive) schemes encourage domestic manufacturing of electrical steel.
- Renewable energy targets (500 GW by 2030) are increasing demand for efficient transformers and grid systems.
- Growing Power Sector Investments
- India is investing heavily in power transmission infrastructure with a planned outlay of INR 2.5 lakh crore (USD 30 billion) over the next five years to modernize the grid.
- Rising electricity consumption (projected to grow at 5-6% annually) is driving demand for electrical steel in power transformers.
- Automotive Electrification & Industrial Growth
- India’s EV market is expected to reach 10 million units by 2030, significantly boosting NGO electrical steel demand.
- Smart appliances and industrial automation are further driving market expansion.
Challenges & Constraints
- Dependence on Imports: India imports a significant portion of its electrical steel, especially GOES, from countries like Japan, China, and South Korea.
- Price Volatility of Raw Materials: Fluctuations in iron ore and alloy costs impact profitability.
- Environmental Regulations: Stricter emission and energy efficiency norms pose compliance challenges for manufacturers.
Competitive Landscape
Major players in the Indian electrical steel market include:
- Domestic Producers:
- Tata Steel
- JSW Steel
- Steel Authority of India Limited (SAIL)
- ArcelorMittal Nippon Steel India (AM/NS India)
- International Players with Local Presence:
- POSCO (South Korea)
- Nippon Steel Corporation (Japan)
- Baosteel Group (China)
Several Indian steelmakers are investing in R&D and capacity expansion to reduce import dependence and meet growing demand.
Future Outlook
With strong policy support, increasing EV penetration, and growing power sector investments, India’s electrical steel market is poised for significant expansion over the next decade. The push for self-reliance in electrical steel manufacturing under initiatives like "Make in India" and PLI schemes is expected to transform the industry.
