Which Sector will Drive Steel Demand by 2035?

India is going to need a lot more steel. Between 240 and 260 million tonnes (Mt) by 2035, growing at 5–6% annually. That number is not a forecast to file away. It will determine what you buy, when you buy it, and how much you pay. 

Most procurement teams know demand is rising. Fewer understand why or which product categories will feel it first. The ₹13.24 lakh crore National Infrastructure Pipeline, combined with India’s push into renewables, EVs, and defence, is distributing that demand unevenly across sectors. The breakdown matters. 
 

Steel Market Trends (FY26 – FY35) 

Here is what the data shows, sector by sector. 
 
Construction and Housing: The Floor, Not the Ceiling 

In 2025, construction and housing accounted for 51% of finished steel consumption in India, the single largest share by a wide margin. This is not a mature, flat sector. It is an active one. 

Affordable housing mandates under PMAY-U and state-level schemes require roughly 35–45 Mt of structural steel, TMT bars, and hollow sections. Aggregate consumption is projected at 50%–60% of the total steel consumption through 2035. The expansion of South India’s urban skyline after 2035, defined by IT hubs and high-rise residential towers, will drive a massive shift in procurement. Expect a sharp spike in demand for 500D/550D-grade TMT, specialized structural steel, and pre-fabricated frames. 

For Indian steel buyers, the implication is straightforward: structural steel and rebar pricing will remain under pressure throughout the project cycle. Contract stability, grade certification, and reliable lead times are not differentiators, they are baseline requirements. 
 

Commercial Infrastructure: The Share Is Growing, Not Just the Volume 

Infrastructure’s share of total steel consumption stands at roughly 28% today. By 2030, that share is projected to reach 29%.  

The steel industry’s CAGR through 2031 is estimated at 9.12%, with Bharatmala Phase-I as a primary driver. The product mix is specific: structural steel, rails, plates, and HR/CR coils for Dedicated Freight Corridors and metro rail systems. In India, metro expansion has been underway since 2017 and continues to compound. Infrastructure-driven consumption is projected at 72-78 MTPA by 2035. 

Buyers in this segment need visibility into plate and structural grades well ahead of project milestones. Spot purchasing at this scale carries real price risk.

Automotive and EVs: Lower Volume, Higher Margin  

Automotive demand is no longer just about tonnage. It is about grade. As Government of India had visioned to achieve 30% of EV market share by 2030, steel demand is shifting toward premium inputs, AHSS for lighter, crash-safe body structures, chassis-related applications and weight reduction, and electrical silicon steel specifically for EV motors, drivetrains, and charging infrastructure. That shift is already building a domestic EV steel market projected to grow from ₹2.32 lakh crores in 2025 to USD ₹3.48 lakh crores by 2031. 

The automotive sector is not running short of steel. It is running short of the right steel. AHSS, electrical steel, and coated grades are the bottleneck, not volume, not pricing. For South Indian buyers, the supply-side pressure is local and immediate, regional manufacturing concentration means buyers are competing for the same specialty grades, in the same geography, at the same time. That is not a market cycle problem. That is a sourcing strategy problem.

Also Read - How ‘Make in India’ Shifted the Gears of the Auto Sector

Renewable Energy and Defence: Structural Demand from Non-Traditional Buyers 

These two sectors are emerging as significant structural steel consumers and are growing fast enough to affect the broader market. 

India’s 500 gigawatts (GW) renewable energy target isn't just about power. It’s about tonnage. 

The requirements are specific: 35–45 tonnes per megawatt (t/MW) for solar. 50 t/MW for onshore wind. 300 t/MW for offshore installations. In 2025–2026, to achieve this demand 25-29 MTPA is required. Total renewable-driven consumption is projected to rise from 2.8 Mt in 2025 to 4.8 Mt by 2035. 

Defence and aerospace are smaller in absolute terms, but they are growing and increasingly pulling premium-grade product. Buyers outside these sectors should be tracking this demand, because it competes for the same upstream supply.

Future Growth of Steel Industry by Sector

What This Means for Steel Buyers: Procurement Strategy 

Steel demand in India is not rising uniformly. It is rising by sector, by grade, and by region. At different rates and at different times. At the national level, demand grows at 5–6% annually through 2035. In South India, infrastructure and renewable sector demand will outpace that average. 

Demand mapping to 2035 is not a theoretical exercise. It is a procurement risk management tool. Understanding which grades are being absorbed by which sectors, and in what volumes, is the difference between buying at the right time and reacting to a shortage. 

HASHTAGSTEEL is built for this. The platform gives buyers in South India the ability to track demand for TMT, HR/CR, structural, and pipe-grade steel, alongside price movements and inventory levels, before shortages arrive. Not after.

Conclusion: The Market Will Reward the Buyers Who See It Early

By 2035, India will not just need more steel. It will need more of the right steel, in the right grades, in the right regions, at the right time. That is the real takeaway. Construction will absorb volume. Infrastructure will deepen category demand. Automotive, EV, renewables, and defence will keep pulling the market toward higher-specification products and tighter procurement windows.
For South India buyers, where manufacturing, infrastructure, and specialty steel demand are increasingly concentrated, the risk will not begin with price. It will begin with visibility. In that kind of market, reactive buying gets expensive fast. HASHTAGSTEEL is built for the buyers who want to read demand before it hardens into shortage, secure material before competition closes in, and make better procurement decisions with confidence. The next question is simple: when the market tightens, will you be tracking it early enough to act? 
 

SOURCES/REFERENCES:

1. Strengthening the future: Steel for growth and resilience
2. INDIA STEEL MARKET SIZE & SHARE ANALYSIS - GROWTH TRENDS AND FORECAST (2026 - 2031)
3. India’s steel demand projected to surge 260 million metric ton by 2035
4. Automotive Metal Market
5. India Ranks third globally in Renewable Energy Installed Capacity: Shri Pralhad Joshi
6. Indian Steel Demand Outlook by Sector: Mapping the 2030 Growth Path 
7. India EV Steel Market by Region, Competition, Forecast & Opportunities, 2021-2031F
8. India Electric Steel Market Research Report 2025-2032 
9. Electric Vehicles in India