14 Oct, 2025
India's small steelmakers cut output as weak demand, falling prices bite
NEW DELHI, Oct 13 (Reuters) - India's small steelmakers are struggling with weak demand, rising inventories and falling prices, highlighting a construction slowdown despite New Delhi introducing its biggest consumer tax cuts in eight years to boost growth and counter steep U.S. tariffs.
India's economy grew 7.8% in the April-June quarter, above analysts' expectations, but a slowdown in steel demand - reflecting weaker construction activity - points to some caution over whether the rapid pace of growth can be sustained.
Last month, India sharply cut taxes on hundreds of consumer items, including small cars and cement, the key sectors influencing steel demand, to spur consumption and offset the impact of punishing U.S. tariffs on Indian goods.
Still, small steel producers, who account for about 45% of India's total steel capacity of around 200 million metric tons and employ more than 1.5 million people, said they have cut production by up to a third as construction activity remains weak and demand from the automobile sector has yet to pick up.
Heavy monsoon rains have slowed demand from the construction sector, which accounts for nearly a third of steel consumption, while rising input costs, including iron ore and electricity, weigh further on the industry.
Originally published on reuters
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