Domestic Stainless Steel Industry Set For Volatile Q1FY26, As Surge In Imports Causes Concerns: ISSDA

Abhyuday Jindal, MD, Jindal Stainless, noted that India has a stainless steel production capacity (long and flat) of 7.5 MT, yet nearly 40 per cent of this capacity remains underutilised.

The domestic stainless steel industry is set to face significant headwinds in the first quarter of FY26, beginning April 1, with rising imports posing a major challenge to its growth trajectory, the Indian Stainless Steel Development Association (ISSDA) said. 

Additionally, experts said that price volatility in critical raw materials still remained a concern for manufacturers. Speaking on a query about the outlook for the first quarter of the 2025-26 fiscal year (FY26), Rajamani Krishnamurthi, President, ISSDA, noted, "The influx of low-cost stainless steel imports, primarily from China and Vietnam, continues to pressure Indian manufacturers," reported PTI.

The executive emphasised that fluctuating raw material costs, especially for nickel and ferroalloys, further complicated the industry's stability. With global uncertainties and mounting competition, profit margins could take a hit, Krishnamurti added.

Echoing similar concerns, Abhyuday Jindal, Managing Director of Jindal Stainless, noted that India has a stainless steel production capacity (long and flat) of 7.5 million tonnes (MT), yet nearly 40 per cent of this capacity remains underutilised. Workforce availability is another pressing issue, he said, adding that efforts are underway to build a skilled labor ecosystem through initiatives such as the Stainless Academy.

This program has already trained over 40,000 fabricators across India, addressing gaps in sector-specific skill development.

Import Trends and Market Challenges

According to market research firm BigMint, India’s finished stainless steel imports are expected to hit a record 1.3 MT in FY25—almost three times the 0.5 MT recorded in FY18. On a year-on-year basis, this marked a 28 per cent increase from 1.03 MT in FY24. However, China continued to be the dominant supplier, followed by Indonesia and Vietnam.

On the raw material front, BigMint noted that supply chain security could be at risk as global economies adopt more protectionist trade policies. India relies entirely on nickel imports, sourced predominantly from Indonesia, while high-grade ferroalloys are mainly procured from European markets.

Additionally, India’s stainless steel scrap imports—a crucial raw material—are projected to decline by 9 per cent year-on-year to 1.2 MT due to tightening global trade restrictions and cost concerns.

Currently, domestic scrap availability meets only 25-30 per cent of total demand, raising concerns over raw material security.

Despite these challenges, stainless steel consumption in India is expected to rise by 22 per cent year-on-year in FY25, reaching 3.6 MT, and is projected to grow further by FY30. This growth aligns with India’s economic expansion and large-scale infrastructure investments, which are anticipated to drive demand to approximately 6.6-6.8 MT by the end of the decade.