EY says India’s need for scrap imports will continue

An analysis published in early March by an India-based partner with consulting firm EY concludes steel mills in that nation will continue to require recycled steel imports as they both increase production and attempt to lower their carbon footprints.

Regarding imported scrap specifically, “India’s domestic scrap generation is insufficient due to a relatively young steel stock and limited organized recycling,” writes Kapil Bansal a partner focusing on energy transition and decarbonization at EY-Parthenon India. “This creates a structural supply gap, making imports necessary to meet growing demand from scrap‑based steelmakers,” he adds.

In the wider landscape, Bansal says India’s “green steel pathway hinges on how strategically scrap is integrated across production, reporting and finance.”

Melting more scrap in Indian furnaces can “materially support the country’s ambition of net zero steel,” writes the consultant.

As of 2026, however, Bansal says scrap consumption in the Indian steel sector “remains below global benchmarks, despite its strong potential to reduce emissions and input costs.”

Recycled steel “already plays a meaningful role in induction furnaces, electric routes and foundries, yet India’s overall scrap share in crude steel production remains well below the global average,” says Bansal, citing the continued large-tonnage presence of iron ore-fed blast furnace-basic oxygen furnace (BOF) production in the nation.

A situation involving rising steel demand in India combined with stated climate commitments means “steel scrap has emerged as one of the most immediate and scalable solutions to lower emissions while strengthening resource security,” concludes the consultant.

In the Indian electric arc furnace (EAF) sector, capacity is expanding, but many EAFs “continue to rely heavily” on direct-reduced iron (DRI) as feedstock.

Within India, Bansal says that end-of-life vehicle (ELV) and ship recycling and “formal scrap-processing frameworks” are gradually boosting domestic scrap supplies. He also recommends additional policy support.

On the import front, Bansal points to “geopolitical risks” at a time when conflict in the Middle East is interrupting the flow of recycled steel from the nations in the Persian Gulf region to potential buyers in India.

“Aligning scrap strategies with emissions reporting, green finance and product-level disclosures will be essential as global markets increasingly differentiate steel based on carbon intensity,” concludes Bansal.

The United States recycled steel market is poised to benefit from Indian steel industry strength or decarbonization. India follows Turkey as a leading exported scrap destination, and the Brussels-based World Steel Association reports the India’s mills increased output by 10.5 percent this January compared with January 2025.