Source: The post “Status of metals and the metallurgy sector in India” has been created, based on “Forging India’s metals security” published in “Business Line” on 25 October 2025. Status of metals and the metallurgy sector in India.
UPSC Syllabus: GS Paper -3- Indian Economy and issues relating to Planning, Mobilisation of Resources, Growth, Development and Employment
Introduction: India’s metals and metallurgy sector is at a critical juncture due to rapid demand growth driven by infrastructure, renewable energy, electric mobility, and advanced manufacturing. However, India faces a widening metals trade deficit, importing high-value metals while exporting low-value metals, which undermines industrial capability and strategic autonomy.
Status of metals and the metallurgy sector
- India’s metals trade deficit reached USD 14.15 billion in 2024, accounting for (-)5.4% of the national trade deficit of USD 261 billion, showing deep structural weakness.
- The country has shifted from a USD 1.96 billion surplus in 2004 to a chronic net importer over the past two decades.
- Copper (HS:74) has shown the sharpest deterioration, falling from a USD +0.36 billion surplus (2004) to USD (–)8.36 billion deficit in 2024, worsened by the Sterlite closure and import reliance on Chile and Africa.
- Nickel (HS:75) remains structurally negative, slipping from USD (–)0.26 billion (2004) to USD (–)1.10 billion (2024), with no overseas mineral assets to offset scarcity.
- Iron & Steel (HS:72) moved from USD +9.52 billion surplus in 2021 to USD (–)7.33 billion deficit by 2024, illustrating severe competitive stress.
- Aluminum (HS:76) recorded a brief surplus peak in 2021 but slid back into deficit by 2024.
- Deficits persist in tin, zinc, and lead, due to limited refining, weak recycling, and low R&D.
- India has abundant ores like iron ore and bauxite, yet continues to export raw or semi-processed metals while importing high-value alloys, showing shallow value-addition.
Challenges
- Heavy Import Dependence for Key Metals: India depends on imports for copper, nickel, cobalt, and other critical minerals essential for clean energy, aerospace, and electronics. This dependence creates economic stress and national security concerns.
- Structural Asymmetry in Trade: India exports low-value iron and steel products while importing high-value alloys and metal inputs. The metals trade deficit reached USD 14.5 billion in 2024, constituting 5.4 percent of India’s total trade deficit.
- Declining Domestic Production and Mine Disruptions: Closures of critical mines such as Sterlite Copper have worsened shortages. Many domestic mineral reserves remain underexplored due to slow policy responsiveness.
- Weak Value Chain Integration: India lacks advanced smelting capacity and high-end processing technologies, which results in fragmented supply chains and limited capacity to move up the value chain.
- Underdeveloped Recycling and Secondary Metal Sector: Recycling of aluminium, lead-acid batteries, and e-waste is mostly informal, resulting in inefficient material recovery, high environmental risks, and continued import reliance.
- High Input Costs and Low Energy Efficiency: Outdated technologies, scattered production units, and insufficient Research & Development increase domestic production costs and reduce competitiveness.
- Logistics and Infrastructure Bottlenecks: Poor logistics networks elevate transport costs, while delays in environmental clearances and compliance burdens slow capacity expansion.
- Geopolitical Risks in Global Supply Chain: Critical minerals supply chains are controlled by a few nations, such as China, Indonesia, and the Democratic Republic of the Congo. India remains vulnerable to external shocks and price manipulation.
- Vulnerabilities through Trade Agreements: Certain Free Trade Agreements allow low-cost imports that disrupt domestic production and encourage re-routing of metals, weakening India’s industrial security.
- Exposure to Technological and Green Transition Risks: Dependence on imported battery materials for electric vehicles, solar panels, and storage systems threatens renewable energy goals.
Implications
- Strategic Vulnerability: Disruptions in metal supplies can constrain defence, aerospace, and semiconductor sectors. These sectors rely heavily on speciality metals and high-grade alloys.
- Loss of Industrial Opportunity: India forfeits value addition, export potential, and job creation by not processing metals domestically.
- Increased Volatility and Cost Burden: Imports expose India to fluctuating global prices and foreign policy pressures, negatively impacting infrastructure and manufacturing costs.
Way Forward
- Enhancing Domestic Resource Security: India must accelerate mineral exploration, develop deep-sea mining capacities such as the Carlsberg Ridge initiative, and establish strategic critical mineral reserves.
- Strengthening Domestic Value Addition: Developing large-scale integrated metal parks, modern smelting infrastructure, and metallurgical innovation through PPP models can increase industrial depth.
- Formalising and Expanding Metal Recycling: A strong circular economy requires Extended Producer Responsibility (EPR), regulated recycling hubs, and advanced technologies to manage scrap, e-waste, and battery waste.
- Ensuring Sustainable and Responsible Mining: India must balance ecological concerns with economic development by adopting global environmental and safety standards in mining operations.
- Building a Strong Policy and Regulatory Ecosystem: Faster approvals, stable mining policies, and infrastructure investment will improve ease of doing business and attract major investments.
- Enhancing International Collaboration: India should secure overseas mineral supply agreements, diversify import sources, and participate in secure global critical mineral alliances.
- Reducing Vulnerabilities through Technology and R&D: Increased funding for R&D, including high-quality alloy production and clean metal technologies such as green aluminium, can strengthen competitiveness.
Conclusion: India’s metals security is central to its ambition of becoming a global manufacturing hub. A holistic strategy that strengthens mineral self-reliance, boosts domestic value addition, formalises recycling, and secures resilient supply chains will reinforce India’s industrial sovereignty and long-term economic sustainability.
Question: India’s rising metals demand has created structural vulnerabilities. Discuss the challenges and suggest measures to secure India’s metals sector.
