India’s steel industry is on a path of expansion, prompting optimism among iron ore miners looking for new markets as China’s output declines. Presently, India’s steel-making capacity stands at approximately 200 million metric tons per annum, with bold plans to boost this figure to 300 million by 2030. However, whether these aspirations can be met is a complex question that hinges on domestic iron ore production capabilities. India is the fourth-largest iron ore producer globally, with a record output of 289 million tons reported for the fiscal year from April 2024 to March 2025.
This increase from 277 million tons in the prior year highlights the country’s growing resources, yet it remains insufficient to support a 300 million tons per annum steel industry. The production requirements to produce steel are significant; typically, it takes about 1.6 tons of iron ore to yield one ton of steel. While Vedanta Group Chairman Anil Agarwal suggests that India could eventually surpass China and Brazil in iron ore production, achieving substantial increases in a short time frame seems unlikely. The Indian Steel Association anticipates a shortfall of over 100 million tons of iron ore shortly, which implies a necessity for heightened imports.
Currently, India is a net exporter of iron ore, primarily sending lower-grade ores to China while importing higher-grade materials for blending with local production. During the first five months of 2025, India exported 13.67 million tons, with a substantial portion (11.11 million tons) going to China. However, exports are declining as internal demand rises, while imports are ascending, with the expectation that they could exceed 10 million tons this year. Nevertheless, reaching a shortage of 100 million tons by 2030 is a considerable challenge, dependent on the pace of steel capacity expansion and the response from domestic miners.
With 20 million tons of new capacity currently under construction, the increased demand for iron ore is expected to lead to higher imports, although the immediate increase in volumes may be modest. Ultimately, India is likely to experience a continued trend of reduced exports of lower-grade iron ore and increased imports of higher-grade ore in the foreseeable future.