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Indian Ferrous Scrap Market Overview

The Government of India (GoI) is taking measure to make India the global hub for manufacturing and to become the world’s largest producer of steel by increasing the production capacity to 300 million tons annually by 2030.  

India is the second largest producer of steel in the world after China, with a production capacity of approximately 110 million metric tons per annum. An ambitious “Self-Reliant India” plan to make India a global hub for manufacturing for the automobile, defense, aviation, pharmaceutical, and other industries is initiated. The plan amplifies demand for ferrous scrap to produce steel and other metals.  

Currently, India’s scrap market is highly unorganized. Most operations are manual and carry major safety and environmental concerns.  In 2019, primary and secondary steel producers used approximately 32 million metric tons of ferrous scrap, an increase of 11.4 percent over the previous year. Approximately 25 million metric tons were sourced through the local scrap dealers, and the remaining 7 million metric tons were imported from China, United States, United Arab Emirates, Saudi Arabia, Iraq, and other markets.  

Despite the huge demand for steel in early 2020, the sector felt the impacts of the Covid19 pandemic. More than 60,000 containers of imported scrap accumulated at Indian ports in the first and second phase of the lockdown (March – May 2020).  As there was no demand for steel from other sectors. Manufacturers hesitated to clear those shipments from the ports.  Moreover, the shortage of labor and inter-state restrictions halted the collection and supply of household and industrial scrap.  

This resulted in the increase of finished goods prices in India. To overcome this situation, the Government of India permitted secondary sector steel producers to use directly reduced iron a.k.a. sponge iron for production. This not only managed to meet the interim demand of the steel in the country, but also helped other industries to revive faster than expected.     

The GoI has taken some major steps in the FY21 budget to boost the production of steel in India, such as removing duties on imports of scrap and clearing the Voluntary Vehicle Scrappage policy.  As a result, scrap from steel, aluminum, and other ferrous and non-ferrous metals can be used again in the manufacturing of new products.   

As the GoI works towards ambitious plans such as Self-Reliant India or “world’s largest steel producer”, the consumption of ferrous scrap will increase in both the primary and secondary steel manufacturing segments, and is projected to reach approximately 75 million tons per annum by 2030.  

In 2020, the United States was the second largest exporter of ferrous scrap to India, with a 12.4 percent market share after the United Arab Emirates’ 12.5 percent and exported ferrous scrap worth 337 million US Dollars to India. Therefore, the recent developments in the Indian market will encourage full-service recycling companies and scrap traders to explore potential export opportunities to the Indian market.

For more information, please contact the U.S. Commercial Service’s Indian Industrial Material team: Geoffrey Parish, Principal Commercial Officer, North India, ( or Raman Ahuja, Commercial Assistant, Industrial Material Team Member; Report Author (