India's FY25 steel demand to be slower as elections loom: Analysts, officials
India's steel demand will likely slow in the next financial year beginning March as a mammoth general election will delay government projects and infrastructure spending, analysts and industry executives said.
Steady government spending on infrastructure projects propelled India, the world's second-biggest crude steel producer, into one of the fastest-growing markets for the alloy globally, even as world demand slackened.
But steel demand is expected to grow at a modest 7%-10% in the 2024-25 fiscal year, slower than a projected 11%-12% growth in the current year to March 2024, the analysts and industry executives said.
Prime Minister Narendra Modi's ruling Bharatiya Janata Party will seek a third term in the next general elections due in early 2024. Staggered voting in India's general elections, the world's largest democratic exercise, takes place for weeks.
«We expect finished steel consumption in India to increase by 9% in FY25, following a 12% rise in FY24,» Fitch Ratings said.
But India would still remain the main growth market globally for steel, it said.
Finished steel consumption hit a five-year high between April and October as construction activity picked up and the automobile sector showed robust demand.
The construction sector grew 13.3% year-on-year in the July-September quarter and posted a 7.9% growth from the previous quarter to June 2023, the highest in five quarters.
