Amid oversupplied global steel markets, geopolitical uncertainties, evolving trade barriers, and tightening sustainability regulations, the rating agency India Ratings and Research (Ind-Ra) has said that India will remain among the fastest-growing steel markets globally in FY27. Further, it expects the sector's strengthened balance sheets to support ongoing investments without materially weakening leverage metrics.
With continued infrastructure spending by the government, healthy demand from the construction, engineering, and automotive sectors, and a likely pickup in private corporate capex, Ind-Ra expects steel demand to grow at a high-single-digit percentage year-on-year in FY27 from 7.4% in FY26. Besides, it has maintained a neutral outlook on the Indian steel sector for FY27, with strong domestic demand, supportive trade measures, stable raw-material costs, and disciplined capacity expansion continuing to support profitability, cash flows, and credit profiles.
In spite of this, Ind-Ra pointed that raw material price volatility, significant capacity expansion risks, lower import quota in the EU, and the impact of Carbon Border Adjustment Tax (CBAM) on EU exports should be monitored in near to medium-term.
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