Market Outlook
India’s electrical steel market is on track for solid growth through the forecast period, spurred by rising industrial activity and the quick expansion of the energy, automotive, and infrastructure sectors. Electrical steel features superior magnetic permeability and minimal core loss, making it essential for energy-efficient equipment such as transformers, motors, and generators. Skyrocketing demand for electric vehicles and renewable energy systems has already pushed up consumption, and government plans to upgrade power distribution networks are adding further momentum. Rapid urbanization and ongoing industrial projects create a supportive backdrop that should sustain this upward trend.
In addition, the broader rollout of smart grid technology and the general search for more efficient electrical networks are increasing orders for the material. Energy use in India is forecast to double by 2040, implying an enormous rise in the need for transformers and high-efficiency motors. As the country moves toward a more electrified and digitally driven economy, electrical steel stands at the heart of new innovation and investment, reinforcing its growing market position.
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Market Driver Analysis
The main force pushing the Indian electrical-steel market forward is the growing need for energy-saving parts in critical equipment like transformers, motors, and generators. As of 2023, India ranks third in the world for both electricity production and consumption, boasting over 417 gigawatts of installed capacity-more than half from thermal plants, with the remainder supplied by renewables. Expanding generation capacity and upgrading the national grid are thus raising the call for both grain-oriented and non-grain-oriented electrical steel.
Indias push for cleaner power and the electrification of public transit is amplifying this demand further. Under the FAME II program, the government plans to launch 7,000 electric buses, 500,000 e-three-wheelers, and 55,000 e-cars in the coming years. Each of these vehicles relies on non-grain-oriented electrical steel to boost motor efficiency. As a result, makers of EV components now treat electrical steel as a must-have input, creating steady orders for suppliers.
Another key driver of growth is the rapid rise of the construction and real-estate industry. In fiscal year 2023, Indias building sector expanded by more than 10%, ranking it among the nations quickest-evolving fields. Because new commercial and residential projects require far more power, demand is surging for efficient transformers and distribution units that use high-quality electrical steel.
At the same time, the Make in India campaign and the Production-Linked Incentive schemes are pushing factories to make core electrical parts at home. By reducing reliance on imports, these policies are also raising domestic consumption of electrical steel. Manufacturing accounted for roughly 17.7% of GDP in 2023 and is expected to grow further, driving the need for advanced materials like electrical steel.
Market Trends Analysis
One of the most prominent trends shaping the India electrical steel market is the increasing penetration of electric vehicles. With Indias EV sector on track to claim 30% of the passenger-car market by 2030, the demand for electric motors built with non-grain-oriented electrical steel has risen sharply. In response, producers are focusing on high-silicon, high-performance grades specifically designed for EVs, thereby raising industry standards.
Another notable trend is Indias rising spending on clean power, especially wind and solar. In 2023 the country added more than 15 gigawatts of fresh renewable capacity. Electrical steel plays a crucial role in the generators of wind turbines and in solar inverters alike. As India pursues 500 gigawatts of non-fossil capacity by 2030, the need for this specialty steel in green energy systems keeps growing.
Automation and smart manufacturing are likewise lifting demand for electrical steel in factory motors and robots. Indias automation market is set to expand at double-digit rates, driven by automotive, textile and food-processing firms. High-efficiency motors built with electrical steel sit at the heart of smart plants and energy-conserving production lines.
Manufacturers are also ramping up R&D to produce thinner steel strips with even stronger magnetic performance. These innovations boost efficiency, cut carbon output, and help companies meet tougher environmental rules. For instance, high-grade grain-oriented electrical steel, known as HiB, is now the material of choice in key transformers because it sharply reduces core losses.
Digital transformation across Indias power and utility sector is driving smart grid rollouts in cities and countryside alike. Those modern grids call for upgraded transformers and switchgear, which in turn raises the need for high-grade electrical steel. At the same time, growing partnerships between multinational firms and Indian manufacturers are speeding up technology transfer and product innovation, improving both the quantity and quality of locally made steel.
Despite this optimistic backdrop, several headwinds still threaten the markets upward path. The first major hurdle is Indias heavy reliance on imports for premium raw materials and high-grade electrical steel. Because domestic mills cannot yet produce cold-rolled grain-oriented (CRGO) steel in large volumes, manufacturers source most of it from Japan and South Korea, a dependency that carries extra cost and longer lead times.
Price swings in basic inputs such as iron ore and coking coal compound the problem. When these raw material costs spike or slump, so do the production expenses for electrical steel, leaving makers with unpredictable margins. In fiscal year 2023, iron ore prices moved sharply in response to global supply-chain shocks and changing demand, adding fresh financial strain on Indian steel producers.
The disjointed supply chain and the absence of industry-wide standards continue to hold growth back. Smaller and midsize producers struggle to obtain cutting-edge factory tools, which in turn harms uniformity and overall quality. On top of that, weak roads and logistics in some areas slow deliveries, push back deadlines, and drive up costs.
Tightening environmental rules add another layer of difficulty. Making electrical steel consumes large amounts of power and releases considerable emissions. Local plants must therefore upgrade to cleaner systems and comply with tough new limits set by the Perform, Achieve and Trade PAT program as well as other Ministry of Environment mandates.
The Indian electrical steel market is also extremely sensitive to price. Even with tariffs and protective measures, lower-cost imports frequently under-sell home-based companies, forcing them to match bargains while still delivering reliable, high-grade sheets.
Meanwhile, a shortfall of skilled workers and modern research centers stifles progress in both product design and production methods. Though authorities are ramping up technical training and expanding R&D facilities, closing the current skills and capacity gap will inevitably take years.
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Segmentations
India Electrical Steel Market, By Type:
- Grain Oriented Electrical Steel
- Non-Grain Oriented Electrical Steel
India Electrical Steel Market, By Application:
- Transformers
- Motors & Generators
- Inductors
India Electrical Steel Market, By Vertical:
- Automotive
- Construction
- Manufacturing
- Energy & Power
- Others
Regional Analysis
The Indian electrical steel industry reveals a patchwork of demand shaped by where factories are located, the state of power networks, and the pace of urban growth from one region to another. Southern and Western states top the league because they host most manufacturing activity and renewable power projects. Tamil Nadu, Maharashtra, and Gujarat therefore stand out as the leading customers for this specialty steel.
Maharashtras mature auto and machine-making clusters around Pune and Nashik claim a large slice of the market. The state is also a hub for electric vehicle builders and parts makers, which drives extra rely on non-grain-oriented grades. Moreover, with over 4.6 gigawatts of solar generation installed by 2023, Maharashtra needs countless transformers and motors that demand high-quality electrical steel.
Tamil Nadu, ranking first in renewable output with more than 15 gigawatts, plays an equally vital role. Its robust wind farms depend on generators and converters that use thin electrical steel sheets. Along the industrial corridors of Coimbatore and Chennai, numerous motor and pump builders further cement the states status as a key end-user.
Gujarat leads electrical-steel demand in western India, fueled by brisk industrial growth and port-centered planning. The state is also becoming a renewable-energy hub, boasting over 9.3 GW of solar and around 10 GW of wind capacity. Heavy spending on smart grids and factory automation further lifts its need for high-performance electrical parts.
In northern India, markets around Delhi NCR and Punjab are advancing alongside new smart-city projects and upgraded power networks. Uttar Pradesh is also important: with over 23 percent urban growth, it pours capital into feeders and substations, broadening local demand.
Eastern states such as Odisha and Jharkhand sit on mineral wealth yet falter because roads, power lines, and ports are still incomplete. Planned industrial corridors and better energy grids should lift sales steadily, while Odisha’s own electrical steel mills could turn the region into a major supplier.
Northeastern India now accounts for only a small slice of the national market, thanks to sparse factories. Even so, the North Eastern Region Power System Improvement Project promotes new transformers and lines, offering niche openings for electrical-steel makers.
Growth across Indias electrical-steel markets keeps pace with regional policy incentives, infrastructure readiness, renewable-energy rollouts, and overall industrial activity. Steady state-led investments in manufacturing clusters, along with a wider national power grid, are likely to raise demand further in coming years.
Primary Catalysts and Hindrances
Strengthening drivers include the urgent push for new renewable-capacity, growing electric vehicle sales, and central and state programs aimed at modernising infrastructure. Initiatives such as Make in India, FAME II, and the Production-Linked Incentive scheme encourage local production, lift domestic supply of silicon steel, and cut reliance on imports. Rising consumer and industrial demand for energy-efficient motors and appliances, spurred by cost and climate goals, is quickening market uptake.
At the same time, persistent reliance on overseas sources for cold-rolled, grain-oriented (CRGO) sheets, raw-material price swings and strict pollution rules hold the sector back. Limited local capacity to produce the highest grades of electrical steel leaves manufacturers exposed and, given Indias price-sensitive end markets, tightens margins. Newer emission controls also force heavy spending on cleaner plants and processes that many smaller players struggle to absorb.
Key Players and Analysis
The Indian electrical steel market features a mix of domestic and foreign companies that shape growth with their production scale, innovative practices, and well-established distribution networks.
Aperam Alloys India Pvt. Ltd (AAIPL) and ArcelorMittal India Pvt. Ltd stand out by offering premium grain-oriented grades essential for high-efficiency transformers. Tata Steel Ltd, the large home-grown player, retains a leading position thanks to fully integrated mills and strong R&D programs focused on next-generation electrical steel.
POSCO Electrical Steel India Pvt. Ltd, part of the global POSCO group, dominates the non-grain-oriented segment for auto and motor applications. State-owned Steel Authority of India Ltd (SAIL) meanwhile supplies both grain and non-grain grades for key infrastructure and power grid projects nationwide.
Nippon Steel Engineering India Pvt. Ltd and Voestalpine High Performance Metals India Pvt. Ltd have secured niche roles by pairing cutting-edge technology with local partnerships. Thyssenkrupp Electrical Steel India Pvt. Ltd adds German engineering know-how, providing HiB steel for ultra-efficient transformer designs.
JSM Steel India Private Limited serves the mid-tier segment with a adaptable range of products that underpins many small-and-medium enterprises. These firms, in turn, fuel innovation, tighten supply chains, and help India move toward self-reliance in key strategic materials such as electrical steel.
Future Outlook
- Surge in domestic production of CRGO electrical steel.
- Expansion of EV manufacturing units boosting demand.
- Growth in renewable energy infrastructure.
- Increased investment in smart grids and automation.
- Advancements in thin-gauge, high-silicon electrical steel.
- Expansion of transformer and motor export markets.
- Integration of AI in manufacturing for quality control.
- Establishment of regional electrical steel clusters.
- Government support for R&D in magnetic materials.
- Enhanced environmental compliance and green steel production.
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