India Electrical Steel Market to Surge at a 10.5% CAGR, Reaching US$ 3.8 Bn by 2031 | Persistence Market Research Report

The India electrical steel market is on a robust growth trajectory, forecasted to expand at a compound annual growth rate (CAGR) of 10.5%. The market, which stood at a value of US$1.9 billion in 2024, is expected to reach a significant US$3.8 billion by the end of 2031. This expansion is driven by various factors, such as increasing demand from key end-user industries, technological advancements, and India's continued industrialization. Electrical steel, also known as silicon steel, is essential for the manufacturing of electrical equipment, particularly transformers, electric motors, and other high-performance machines.

This surge in market value is indicative of a larger trend towards infrastructure and energy development in India. The increasing penetration of renewable energy technologies and a rising emphasis on energy efficiency further reinforce the demand for electrical steel. As the market grows, India is set to become one of the key players in the global electrical steel industry. Understanding the drivers, opportunities, and competitive landscape will be crucial for stakeholders to navigate this evolving sector.

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Key Highlights from the Report:

➤ The India electrical steel market is expected to expand at a CAGR of 10.5% between 2024 and 2031.
➤ The market size will increase from US$1.9 billion in 2024 to US$3.8 billion by 2031.
➤ Growth in demand is driven by the automotive, power generation, and energy sectors.
➤ The market's growth is further fueled by technological advancements in manufacturing processes.
➤ India is the fastest-growing region in the Asia Pacific electrical steel market.
➤ The demand for high-quality electrical steel is anticipated to rise with the shift towards renewable energy sources.

Market Overview

India's electrical steel market is witnessing significant growth, fueled by increasing demand from multiple industries, especially the automotive and power generation sectors. Electrical steel is widely used in the production of transformers, electric motors, and other electrical devices, making it a critical material in the manufacturing process. The development of infrastructure, the rise of electric vehicles (EVs), and the push towards cleaner energy solutions are all playing an important role in driving the demand for electrical steel in India.

Several factors are contributing to the market's expansion, with India's growing industrial base being one of the key drivers. Additionally, a favorable regulatory environment and governmental initiatives aimed at enhancing power transmission and distribution are further strengthening the sector. The country's progress towards achieving energy efficiency and sustainability targets will likely see electrical steel playing an even more significant role, propelling further growth in the years to come.

Market Segmentation

The India electrical steel market can be segmented based on product type, end-user industries, and geographical regions. Product Type: Electrical steel is typically divided into two main categories-grain-oriented electrical steel (GOES) and non-grain-oriented electrical steel (NGOES). The former is mainly used in transformers, while the latter is more commonly found in electric motors and other power generation applications.

End-User Industries: The key industries driving the demand for electrical steel in India include automotive, power generation, industrial machinery, and renewable energy. With the rise of electric vehicles and the rapid expansion of renewable energy infrastructure, the automotive and energy sectors are expected to remain the largest consumers of electrical steel.

Regional Insights

In India, the demand for electrical steel is not confined to a single geographical area but is spread across various regions. The Northern and Western regions of India, which have established manufacturing bases and growing industrial sectors, are particularly seeing high demand. Additionally, cities like Mumbai, Pune, and Ahmedabad are hubs for industrial activities, further driving market growth in these areas.

Southern India is also emerging as a key region for the electrical steel market, thanks to the growth of the automotive industry and a favorable business environment. The government's push for industrialization in these regions has spurred the demand for high-performance electrical materials, including electrical steel.

Market Drivers

India's electrical steel market is witnessing growth due to several critical drivers. First, the expansion of the renewable energy sector is one of the leading factors. As India aims to meet its ambitious renewable energy targets, the need for electrical steel in wind turbines, solar power inverters, and other energy-efficient devices is skyrocketing. This shift towards green energy sources has created a strong demand for higher-quality electrical steel that can enhance the performance of energy transmission and storage systems.

The growth of the automotive sector, particularly electric vehicles (EVs), is another significant driver. EVs require high-efficiency electric motors, which in turn necessitate the use of high-quality electrical steel. With the Indian government incentivizing the adoption of electric mobility, the demand for electrical steel in the automotive sector is expected to grow rapidly.

Market Restraints

While the India electrical steel market is poised for growth, there are a few challenges that could potentially slow its progress. One such restraint is the high cost of raw materials, such as steel, which could impact the profitability of manufacturers. Additionally, fluctuations in global steel prices and limited domestic supply of key raw materials might create supply chain uncertainties, affecting market stability.

The lack of advanced manufacturing facilities in certain regions may also hamper the production of premium-quality electrical steel. Despite India's growing industrial base, some regions still face challenges in terms of technological infrastructure and access to high-tech machinery needed for the production of advanced electrical steel.

Market Opportunities

The India electrical steel market is full of opportunities for companies and investors. One of the most significant opportunities lies in technological innovation. Manufacturers are increasingly investing in R&D to create more energy-efficient, lightweight, and high-performance electrical steels. Such innovations will cater to the growing needs of industries like electric vehicles, renewable energy, and power generation.

Another exciting opportunity exists in export markets. India's position as a key manufacturing hub for electrical steel could allow domestic players to cater to the global market, particularly in regions like Southeast Asia and the Middle East. With the growing adoption of electric mobility and renewable energy worldwide, demand for high-quality electrical steel is likely to increase, presenting export opportunities for Indian manufacturers.

Reasons to Buy the Report

✅ Gain comprehensive insights into the current and future growth potential of the India electrical steel market.
✅ Understand key market drivers, restraints, and opportunities shaping the market landscape.
✅ Access in-depth analysis on product segmentation, market trends, and competitive dynamics.
✅ Learn about the regional distribution of electrical steel demand and how to tap into emerging markets.
✅ Leverage the report's detailed competitive analysis to guide strategic decisions and investments.

Company Insights

✦ ArcelorMittal
✦ Tata Steel
✦ Jindal Steel & Power Limited
✦ POSCO India
✦ JSW Steel

■ Tata Steel recently launched a new range of high-performance electrical steel to cater to the growing demand in the automotive sector.
■ ArcelorMittal expanded its production capacity for grain-oriented electrical steel in India, focusing on the renewable energy sector.

In conclusion, India's electrical steel market is poised for significant growth, driven by increasing demand from key industries like automotive, power generation, and renewable energy. With the country's push towards industrialization and sustainability, electrical steel will continue to play a crucial role in shaping the future of India's energy and transportation systems.

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