The Indian government’s initiatives to boost “…abysmally low” per capita steel consumption will see demand growth catch up with new capacity additions. So said Praveen Dixit, Senior Vice President International Marketing at JSW Steel, at last week’s Kallanish Euro-Turkey-CIS Flat Steel Conference in Istanbul.

Until recently Indian steel demand had been growing slower – at 6% annually – than new crude steel capacity additions – at 8.2%. However, the government is changing this by boosting infrastructure investment, among other measures.

An additional 51.1 million tonnes of new steel capacity will be added by India by 2025-26, of which 18.7mt will come from JSW Steel. Hot rolled flats capacity will increase to 91.7m t/year by that year from 61.37m t/y currently, and coated will grow to 13.57m t/y from 10.82m t/y.

With the US introducing trade measures, Indian steel exports have been diverted to Europe, the Middle East and Asia. Indian automotive production, meanwhile, is expected to grow to over 51 million units by 2025-26 versus 30m units today, raising the sector’s steel consumption to 13.2mt from 7.1mt.

“It is said that India resides in villages,” Dixit said. The government sees this as an opportunity to develop rural areas by building roads and connecting people to telephony. The country is also investing heavily into railways and renewable energy, which requires a large tonnage of steel. Rising internet connectivity allows people in rural areas to order products online, thereby encouraging business activity.

When asked about Indian mills’ strategy to avoid being caught out by trade defence measures, Dixit said: “We sell responsibly,” taking care not to fall foul of anti-dumping laws in other countries. “Otherwise in India all the mills are putting in capacity just to serve the domestic market,” he continued. “None of the main mills has put a capacity to serve the export market. Export is just a by-product.”