With a sustained momentum of investment across different sectors, overall steel demand in India is projected to grow at a CAGR of 5 per cent to 7.3 per cent over the next decade leading to a steel demand of 221-275 million tonnes by FY 34 (under different scenarios), according to a report by Deloitte released on Friday.

The report, released at ISA Steel InfraBuild Summit here, also said Maharashtra, Uttar Pradesh, Gujarat, Karnataka and Tamil Nadu have established themselves as leaders in steel consumption, leading to 41 per cent of the total consumption in FY23.

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“Government spending on infrastructure projects will drive the initial growth phase in the next decade. The development of 11 industrial corridors comprising 32 projects, to be developed in four phases under the PM Gatishakti National Master Plan, will be a key driver for steel consumption,” the report explained.

From FY14 to FY24, India’s finished steel consumption posted a CAGR of 5.67 per cent. In FY24, domestic finished steel consumption reached 136 million tonnes, marking more than 14 per cent year-on-year growth driven by sustained momentum across developmental projects and increased government spending in various end-use industries.

The steel industry plays a crucial role in Telangana’s economic landscape as during the last fiscal, the state’s steel consumption grew by 15.75 per cent year-on-year from 4.730 million tonnes in FY22 to 5.475 million tons in FY23, outpacing the national average, it said.

“Telangana’s steel consumption in FY23 was 5.48 MT for a population of 3.5 crore which translates to a per capita steel consumption of 156.43 kg, significantly higher than the national per capita steel consumption of 93.4 kg. This not only underscores the state’s robust industrial activity but also positions Telangana as a key driver of future economic growth,” it said.

The rising growth of electric vehicles in Tamil Nadu will lead to an increased demand for electrical steel, while the growth of food processing industries will drive the demand for stainless steel, the report further said.