India’s rising appetite for secondary steel has brought steel scrap into the spotlight once again. Despite being among the world’s largest steel producers, the country remains structurally dependent on imported scrap — a paradox in a market where domestic collection, segregation, and recycling infrastructure still lag behind demand. With over 140 million tonnes (MT) of steel produced annually, of which nearly 40% comes from secondary producers using electric arc and induction furnaces, the demand for ferrous scrap has never been more critical.
India’s Rising Scrap Demand
According to Joint Plant Committee (JPC) data, India imported 6.8 MT of steel scrap in FY24, up from 5.5 MT in FY23, registering a 24% YoY growth. The key suppliers remain UAE (26%), UK (17%), USA (14%), and Saudi Arabia (9%), together covering over two-thirds of India’s total imports.
| Fiscal Year | Imports (Million Tonnes) | YoY Growth (%) | Top Contributing Countries |
|---|---|---|---|
| FY21 | 5.0 | — | UAE, USA, UK |
| FY22 | 5.3 | 6% | UAE, Saudi Arabia, UK |
| FY23 | 5.5 | 4% | UAE, UK, USA |
| FY24 | 6.8 | 24% | UAE, UK, USA, Saudi Arabia |
Domestic scrap generation is estimated at 28–30 MT/year, while total demand already exceeds 38–40 MT, revealing a supply gap of nearly 10 MT — a deficit projected to expand further as India targets 55–58 MT of scrap consumption by FY30.
Gaps in Domestic Recycling
India’s recycling network remains largely unorganized, with less than 10% of scrap processed through formal shredding or certified recyclers. The Steel Scrap Recycling Policy (2019) was designed to bridge this gap, but implementation has been slow. Organized recyclers such as MSTC, Tata Steel, JSW, and Cero collectively contribute less than 3 MT annually.
| Segment | Estimated Annual Scrap (MT) | Organized Share (%) | Key Constraints |
|---|---|---|---|
| End-of-Life Vehicles | 8–9 | 15 | Limited authorized scrappage centers |
| Construction & Demolition | 6–7 | 5 | Manual collection, poor segregation |
| Industrial & Machinery | 10–11 | 12 | Informal dismantling units |
| Household & Misc. | 4–5 | 2 | Safety and quality issues |
Fragmented supply, low-quality consistency, and weak logistics integration continue to limit the domestic feedstock potential for electric furnace steelmaking.
Price Volatility and Global Trends
Global scrap prices — particularly HMS 1/2 (80:20) CFR Turkey — have fluctuated between USD 340–480 per tonne in the past year. Indian landed prices typically track global trends with a $25–30 discount, but the rupee’s depreciation and higher freight costs have eroded much of that advantage.
| Month (2025) | HMS 1/2 CFR Turkey (USD/t) | India Import Landed (USD/t) | Approx. INR/t (at ₹83/USD) |
|---|---|---|---|
| Jan–Mar | 355 | 330 | 27,400 |
| Apr–Jun | 410 | 385 | 31,900 |
| Jul–Sep | 470 | 445 | 36,900 |
| Oct–Dec (Est.) | 460 | 430 | 35,700 |
As of September 2025, Indian import prices hovered around ₹40,000–43,000 per tonne, while domestic HMS prices varied between ₹38,000–44,000 per tonne, depending on region and freight cost.
Vehicle Scrappage Policy: The Missed Link
The government’s Vehicle Scrappage Policy, aimed at generating 4–5 MT of scrap annually by FY28, remains under-executed. With fewer than 50 authorized scrapping centers currently operational, the inflow of end-of-life vehicles is insufficient to meet industry needs. This gap keeps India dependent on overseas suppliers despite ample potential in domestic waste streams.
Import Mix and Freight Dynamics
The UAE continues to dominate India’s scrap imports due to geographic proximity and shorter shipping cycles. The European Union and United States have gained share in 2024–25 as Turkish demand plateaued, freeing up export availability. Freight from the Middle East costs around $30–35/t, compared to $55–60/t from Europe. Meanwhile, the EU Carbon Border Adjustment Mechanism (CBAM) could indirectly increase scrap exports by discouraging carbon-heavy primary steel shipments.
Regional Price Disparity
Domestic scrap prices remain uneven. Raipur and Mandi Gobindgarh trade HMS between ₹38,000–41,000/tonne, while Mumbai and Chennai average ₹42,000–44,000/tonne. Prices tighten each quarter-end as dismantling slows, while competition from sponge iron limits full substitution in certain states.
Policy Landscape
India’s import duty on steel scrap is 2.5%, though industry bodies including FICCI and SIMA have requested continuation of a zero-duty structure for feedstock security. Policy focus is now shifting toward urban mining, digital scrap exchanges, and traceable recycling frameworks under the national Circular Economy Roadmap by NITI Aayog.
India in the Global Context
Globally, India ranks as the third-largest scrap importer after Turkey and South Korea. Nearly 60% of future steel capacity additions by 2030 are expected via electric furnace routes, increasing long-term dependence on scrap. Without a strong domestic collection system, India’s green steel transition risks external vulnerability to price shocks and freight disruptions.
The Road Ahead
India’s path forward requires an integrated strategy:
- Formalize informal recyclers through incentives and quality certification.
- Attract private investments into shredding and processing units.
- Develop logistics and digital trading infrastructure connecting scrap sources to steel clusters.
- Accelerate vehicle scrappage policy execution to unlock high-quality scrap supply.
With construction and infrastructure demand at record highs, prices are expected to average ₹41,000–45,000 per tonne through FY26, while imports remain above 7 MT annually. Industry events such as the India Steel Recycling & Circular Economy Forum 2025 and 2nd Sandwich Panel Conference, Mumbai, are emerging as critical platforms to shape India’s future recycling ecosystem.
📚 Sources:
- Joint Plant Committee (JPC) Annual Data 2024
- Ministry of Steel – Scrap Recycling Policy 2019
- ICRA & CRISIL Industry Updates
- NITI Aayog Circular Economy Framework
- World Bank Commodity Price Outlook 2025
- SIMA & FICCI Policy Submissions
- Indian Steel Association & JLL Infrastructure Outlook Reports
Disclaimer: Data and insights presented in this article are compiled from publicly available sources including JPC, Ministry of Steel, ICRA, NITI Aayog, and World Bank datasets. Markintel has independently analyzed and interpreted this information for educational and research purposes; it does not represent the official views of any cited organization.
