India, one of the fastest growing steel producers globally, has been characterised by steady government spending on infrastructure projects despite weakening world demand.
However, steel demand is expected to grow by a more modest 7-10% in the 2024-25 fiscal year, compared with a forecast of 11-12% growth in the current year to March 2024.
Government spending is expected to be further delayed as the Bharatiya Janata Party seeks a third term in the 2024 elections. Fitch Ratings forecasts a 9% increase in final steel consumption in fiscal 2025, which would make India the global steel growth leader. However, analysts warn that demand growth based on government capital expenditure may not be sustainable in 2024, especially in the first half of the year.
The construction sector has been the main driver of India's steel market and has shown strong growth. However, concerns persist among industry officials about rising steel imports and high raw material costs.
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