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BUDGET EXPECT: The Big Steel Push?

As the Interim Budget takes centre stage, the steel industry finds itself at the forefront of discussions, eagerly examining the potential ramifications for its market landscape. In contemplating the upcoming post-election budget’s impact on the steel sector, industry leaders are keenly evaluating the measures and policies that could be introduced to fortify the industry and propel demand for steel products.

Additionally, the discourse extends to the realm of technological advancement, with a focus on potential Research and Development (R&D) incentives or funding allocations that could further enhance the industry’s technological capabilities. This story navigates through the expectations of key stakeholders in the steel industry, unravelling the potential avenues through which the forthcoming budget could shape market conditions and pave the way for sustained industry growth.

Things are looking up
The Interim Budget for 2024-25 brings forward significant components directly influencing the steel industry with a substantial allocation of Rs 11.11 trillion for infrastructure development. The Pradhan Mantri Awas Yojana (Grameen) aims to achieve its target of three crore houses, and an additional two crore houses are slated for construction in the next five years.

The introduction of three commodity-specific railway corridors addresses congestion issues in high-traffic zones. Plans are on for new airport construction and the procurement of 1,000 new aircraft. Furthermore, the focus on solar rooftop installations, leading to free electricity for one crore households, opens new avenues. Additionally, financing provisions are tailored for the construction and renovation of houses, particularly targeting the middle-class segments.

Praveen Mam, CEO & ED, JSW Structural Metal Decking, says “The budget bodes well for the steel industry, featuring an 11 per cent increase in infrastructure spending, boosting steel consumption in construction projects. The removal of export tax on finished steel products enhances global competitiveness. A focus on railways, logistics, and regional connectivity, coupled with increased CAPEX in key sectors, promises positive implications. Plans for three new railway corridors, airports, and ports signify strategic infrastructure development. The emphasis on green capital spending aligns with industry sustainability goals. Initiatives to boost rural housing, manufacturing, and automotive sectors are poised to drive heightened steel consumption.”

All this points to a unanimous increase in demand for steel, as Subrat Panda, VP & BU Head, Jindal Steel & Power Ltd, highlights, “This will create a surge in steel demand, bringing in new business opportunities, growth and prosperity for steel suppliers and manufacturers. Projects like the implementation of the three major railway corridor programs under PM Gati Shakti to improve logistics efficiency and reduce cost.”

Mahendra Singh, CEO, Arcedges Building India LLP, points out, “This year’s budget has shown a confident side of government and also a gradual shift from the typically seen as a populist type of budget earlier. The welcoming side of the interim budget for the infra sector was that the government announced plans to increase its capital expenditure on infrastructure projects by Rs 11.1 trillion, up 11 per cent from the previous fiscal year, and Rs 2.5 trillion for railways. Apart from that, PLI schemes for food processing, pharma, defence, and solar will keep adding to the requirements for the steel industry.” Substantial allocations for port connectivity infra projects, new airport development projects will also create a push for steel demand. “We are excited to see the continued demand for prefabricated construction requirements in all of the above sectors. We have planned facility expansion of our Gujarat unit which is already under progress and is likely to be ready to serve from April 2024 onwards,” says Singh.

Gaurav Awasthi, Head – Marketing & Business Development, Everest, looks beyond the interim budget, but points out the obvious preference towards infrastructure development, “If the government allocates significant funds towards infrastructure development projects such as highways, bridges, railways, and urban infrastructure, it could boost demand for steel. The steel industry, being a key supplier to infrastructure projects, stands to benefit from increased government spending in this area. Policies aimed at promoting manufacturing and industrial growth could also stimulate demand for steel.” He emphasises the inclusion of incentives for domestic manufacturing, expansion of industrial zones, or measures to attract foreign investment in manufacturing sectors.

Chandir Khemchandani, Director, PEB360 Solutions (India) LLP, concurs, “The forthcoming budget presents a significant opportunity for the steel industry, particularly with a focus on infrastructure development as evidenced by the previous budget. Increased allocations towards infrastructure projects are set to drive demand for steel, essential for construction activities ranging from highways and railways to airports and urban infrastructure.”

Though, Singh, expresses, “Slight disappointment with respect to the ignorance of long pending demand from warehousing and logistics sector to avail the GST input credit on construction cost. However, since it is an interim budget, there is not much expectation for major announcements before the elections. Although, we may see a clear indication towards a continued focus on infra spending and spending on social infrastructure.”

Key players from the Indian steel domain scrutinise potential measures that could fortify the industry and boost steel demand.

Steel industry’s wishlist
Awasthi urges consideration in adjusting import duties and tariffs on steel and related raw materials to protect domestic producers and promote self-reliance. Changes in trade policies could impact the competitiveness of domestic steel manufacturers and influence market dynamics.

“The steel industry had also sought duty exemptions on key raw materials and input costs like coking coal and PCI coal to help bring down steel prices.” Mam adds, “The steel sector also wants government support on the R&D development of steel so that specialised steel requirements can be manufactured in India and to check rising imports.”

Pointing back to the thrust to infrastructure, Khemchandani elaborates on the implications of the government’s plans for railways, “The government’s plan to convert 40,000 normal railway bogies to Vande Bharat standards underscores the need for extensive steel development.” This initiative not only signifies potential growth in railway infrastructure but also highlights the importance of steel in constructing railway stations and related facilities. He adds, “There is an ongoing project in Mozambique, East Africa, where the company is building a railway station. What makes this project even more noteworthy is the fact that steel has been exported from India for its construction, exemplifying India’s capability in global infrastructure development.”

With a continued focus on sustainability, the interim budget proposed a push for rooftop solar. It details a plan to provide 10 million households with up to 300 units of free electricity per month under the Pradhan Mantri Suryodaya Yojana. This initiative comes with a dedicated budgetary allocation of Rs 10,000 crore.

He further adds, ”Initiatives promoting renewable energy, such as the expansion of rooftop solar systems, will create further demand for steel-intensive structures like warehouses and industrial sheds. This aligns perfectly with our expertise specialising in a diverse array of projects including warehouses, industrial sheds, cold storage facilities, commercial buildings, high-rise structures, and even railway stations and metro stations.”

Awasthi feels, “If the budget prioritises investments in renewable energy projects, sustainable infrastructure, and green technologies, it could drive demand for steel products used in renewable energy infrastructure such as wind turbines, solar panels, and transmission towers and we at Everest are always ready to fulfil market demands.”

That apart, given the global disruptions witnessed in supply chains due to the COVID-19 pandemic, there might be a focus on enhancing supply chain resilience and promoting localisation of industries. Policies aimed at incentivising domestic production and reducing dependency on imports could create opportunities for the domestic steel industry.

The budget may introduce regulations or incentives aimed at promoting compliance with environmental standards and encouraging the adoption of cleaner production technologies in the steel industry. Compliance with stricter environmental regulations could entail additional costs for steel manufacturers but could also enhance their long-term sustainability and competitiveness.

Awasthi states, “The impact of the upcoming budget on the steel industry will depend on the specific policy measures and initiatives announced by the government. By carefully analysing the budget proposals and understanding their implications for infrastructure development, manufacturing growth, trade policies, sustainability, and regulatory compliance, stakeholders in the steel industry can better anticipate market conditions and adapt their strategies accordingly.”

Shifting landscapes
All the experts concur; promoting the import substitution of steel with indigenous products of competitive quality and price is essential.

Panda highlights, “To protect and nurture the domestic steel industry, the government needs to check rising imports as dumping of steel in India can hurt the profitability of players and the investment plans of the steel industry. Also rationalising the taxation on key inputs like natural gas, coking coal, electricity, and iron ore can help the Indian steel industry to be more sustainable.”

Implement public procurement policies that give preference to domestically manufactured steel in government-funded projects. By mandating the use of domestic steel in public infrastructure projects, the government can create a steady and reliable market for local steel producers.

Khemchandani adds, “In the 2024 budget, it is crucial to prioritise measures that not only support but also stimulate demand for steel products, thereby maintaining economic growth and employment opportunities within the steel industry. To achieve this objective, several specific policies and measures can be implemented.”

“This initiative aligns closely with the Make in India campaign, which aims to support domestic manufacturing capabilities. By incentivising the production of high-quality steel domestically, the nation can reduce its reliance on imported steel, thereby strengthening demand for locally manufactured steel products. Moreover, enabling indigenous production not only contributes to self-reliance but also stimulates economic growth by generating employment opportunities across the steel value chain.”

Key players from the Indian steel domain scrutinise potential measures that could fortify the industry and boost steel demand.

Awasthi advises, “Review and adjust trade policies and import tariffs to protect domestic steel producers from unfair competition and dumping of cheap steel imports. Implement measures to safeguard the domestic steel industry from volatile international markets and ensure a level playing field for domestic producers.”

He also recommends establishing a robust regulatory body tasked with controlling the quality of steel products, “This regulatory body would ensure dedication to stringent quality standards, thereby enhancing the credibility and reliability of domestically produced steel. By ensuring superior quality, the confidence of consumers and industries in utilising steel products would be strengthened, leading to increased demand.”

Panda is of a similar opinion, “Policies also need to be put in place to check the import of non-BIS steel material or components like track shoes for excavators, and seamless pipes for cylinder manufacturing. As currently there is no BIS available these are dumped which is hurting the local manufacturing.”

Additionally, reducing import duty rates on steel can significantly impact demand dynamics. By lowering import barriers, the cost competitiveness of imported steel compared to domestic steel would be varied, potentially tilting the scales in favour of domestically produced steel. This measure not only encourages domestic consumption but also supports domestic steel manufacturers by providing them with a level playing field in the market.

He says, “Further push to domestic manufacturing will not only provide a clear advantage to attract investment and create jobs but also make India globally competitive in the long run to emerge as a viable alternative to China and stimulate the demand for steel products.”

In line with broader economic objectives, the budget should prioritise investments in mega infrastructure projects like high-speed rail networks, smart cities, and industrial corridors, which inherently demand substantial quantities of steel. Such strategic investments not only generate immediate demand for steel products but also play a pivotal role in fostering long-term economic growth and development.

Awasthi adds, “Introduce incentives and tax breaks for infrastructure projects that use domestically produced steel. This could encourage developers and government agencies to prioritise the use of local steel, thereby boosting demand for domestic steel products. Encourage industries that are significant consumers of steel, such as automotive, construction, infrastructure, and machinery manufacturing, through targeted incentives and policies. Supporting these industries will indirectly drive demand for steel products and stimulate growth across the entire steel value chain.”

Similarly, the expansion of renewable energy infrastructure, which often relies on steel-intensive components like wind turbines and solar panels, would further support steel demand. Additionally, supporting domestic manufacturing through streamlined regulatory processes and financial incentives for MSMEs promotes a conducive environment for steel consumption across various industries.

He further says, “Provide incentives and subsidies for steel manufacturers to modernise their production facilities and adopt advanced technologies that improve efficiency, reduce costs, and enhance product quality. This would make domestic steel more competitive in both domestic and international markets.”

By implementing these measures and policies, the government can create a conducive environment for the growth of the steel industry, stimulate demand for steel products, and contribute to the overall economic development of the country.

Key players from the Indian steel domain scrutinise potential measures that could fortify the industry and boost steel demand.

Innovation acceleration
When asked whether there were any specific R&D incentives or funding allocations they would like to see to enhance the industry’s technological capabilities, the answer came in a resounding yes. The experts advise a slew of recommendations.

Designers play a pivotal role in shaping the structural integrity and efficiency of pre-engineered buildings. Therefore, providing R&D incentives or funding allocations for the development of refined design software tailored to the PEB industry is imperative. This software should undergo rigorous research and development to ensure its effectiveness in generating precise structural diagrams and plans. Investing in designers’ capabilities through accessible, well-developed software will significantly elevate the industry’s technological standards and streamline the design process.

Kemchandani addresses critical quality concerns, “In light of concerns regarding the integrity of steel used in PEB structures, establishing the National Accreditation Board for Testing and Calibration Laboratories (NABL) recognised testing facilities accessible to the public is crucial. These labs would enable stakeholders to verify the quality of steel materials used in construction projects, enabling transparency and accountability within the industry. Easy access to reliable testing facilities would minimise the majority of substandard practices.”

Similarly, Awasthi emphasises collaborative environments and incubation hubs, “Foster collaboration between the government, academia, and private sector entities through PPPs aimed at advancing R&D efforts in the steel industry. Jointly funded research projects could address key technological challenges and accelerate innovation. Establish technology incubators and innovation hubs dedicated to the steel sector, providing infrastructure, expertise, and funding support to startups and SMEs engaged in developing cutting-edge technologies for the industry.”

Facilitate partnerships between steel companies and academic institutions to leverage academic research expertise and resources for applied R&D projects. Provide funding for joint research initiatives that address industry-specific challenges and opportunities.

Effective project management is essential for optimising the efficiency and timely completion of PEB projects. Kemchandani states that by incentivising research and development initiatives focused on enhancing project management methodologies tailored to the PEB industry, stakeholders can streamline workflows, mitigate risks, and ensure the successful execution of projects. Allocating funds towards the development of innovative project management tools and methodologies will empower stakeholders to navigate complexities inherent in PEB projects, ultimately driving progress and competitiveness within the industry.

The experts also propose the implementation of tax credits or deductions to incentivise research and development investments by steel manufacturers, emphasising improvements in product quality, process efficiency, and environmental sustainability. Simultaneously, advocate for the allocation of grants and subsidies exclusively dedicated to R&D projects within the steel industry. These financial provisions would support initiatives led by steel companies, research institutions, and universities, fostering the development of innovative steel alloys, advanced manufacturing processes, and sustainable technologies.

Panda, on the other hand, veers towards India’s mission to reduce carbon emissions, “India has set a goal of reducing carbon emissions by 50% by 2030 and for the entire economy to be net zero by 2070. As of now steel sector accounts for about 12% of India’s carbon dioxide (CO2) emissions. To achieve our carbon emission goal, we need to push for more technological advancement in steelmaking, to use green fuels like hydrogen, coal gasification, renewal energy etc. which warrants large-scale study and support from the government. PLI scheme can effectively used to make steel makers and users support the manufacturing and usage of green steel.”

To summarise, targeted research and development incentives and funding allocations directed towards empowering designers, ensuring steel quality through NABL testing labs, and enhancing project management practices are integral for advancing the technological capabilities and sustainability of the pre-engineered building industry. These initiatives align with the principles of transparency, accountability, and innovation, fostering a conducive environment for growth and excellence within the PEB sector.

By implementing these R&D incentives and funding allocations, the government can catalyse innovation, foster technological advancement, and enhance the global competitiveness of the Indian steel industry in the long run.

Key Highlights of the Past Three Budgets

Aspect Budget 2022-23 Budget 2023-24 Interim Budget (2024)
Infrastructure Focus – National Highways expansion by 25,000 km. – No major change in duty structure. – 11.1% increase in capital expenditure for infrastructure.
– PM Gati Shakti masterplan for expressways. – PM Awas Yojana outlay raised by 66% to INR 79,000 crore. – Emphasis on building all forms of infrastructure.
– INR 20,000 crore for National Highways network expansion. – Opportunities for private investment enhanced. – Fiscal deficit target for FY 24-25 at 5.1 percent.
Construction & Housing – INR 48,000 crore for PM Awas Yojana. – INR 79,000 crore outlay for PM Awas Yojana (66% increase). – Continuous fiscal prudence.
– Urban Infrastructure Development Fund (UIDF) established. – 17% increase in real terms in likely spending for FY24.
Railways – 2,000 km of railway network under Kawach for capacity/safety. – Highest-ever outlay of INR 2.4 lakh crore for Railways. Introduction of three major railway economic corridors.
– Encouragement for faster metro system implementation. – 100 cargo terminals for multimodal logistics in three years. Conversion of 40,000 normal rail bogeys to Vande Bharat standards.
EV & Solar – Battery swapping policy for EVs. – INR 19,500 crore for PLI in manufacturing solar modules. Allocation of ₹10,000 crore for solar initiatives in 10 million households.
Green Growth – National Green Hydrogen Mission with INR 19,700 crore outlay. – INR 35,000 crore for priority capital investments.
Duty-Related Announcements – Exemption from basic customs duty for raw materials. – Continuation of duty exemptions for steel sector. – No major changes in duty structure.
Overall Tone – Reviving the economy with a huge thrust on infrastructure. – Emphasis on continuity, stability, and strong policy interventions. – Positive tone with a focus on development, research, and sustainability.


“The steel industry had also sought duty exemptions on key raw materials and input costs like coking coal and PCI coal to help bring down steel prices.”
Praveen Mam, CEO & ED, JSW Structural Metal Decking

“To protect and nurture the domestic steel industry, the government needs to check rising imports.”
Subrat Panda, VP & BU Head, Jindal Steel & Power Ltd

“PLI schemes for food processing, pharma, defence, and solar will keep adding to the requirements for the steel industry.”
Mahendra Singh, CEO, Arcedges Building India LLP

“Foster collaboration between the government, academia, and private sector entities through PPPs aimed at advancing R&D efforts in the steel industry.”
Gaurav Awasthi, Head – Marketing & Business Development, Everest

“In the 2024 budget, it is crucial to prioritise measures that not only support but also stimulate demand for steel products.”
Chandir Khemchandani, Director, PEB360 Solutions (India) LLP


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