India Electrical Steel Market, By Type (Grain Oriented Electrical Steel, Non-Grain Oriented Electrical Steel), By Application (Transformers, Motors & Generators, Inductors), By Vertical (Automotive, Construction, Manufacturing, Energy & Power, Others) By Region, Competition, Forecast & Opportunities, 2021-2031F

Market Overview

India Electrical Steel Market was valued at USD 2.25 Billion in 2025 and is expected to reach USD 3.83 Billion by 2031 with a CAGR of 9.10% during the forecast period.  

Electrical steel, also known as silicon steel or transformer steel, is a specialized type of steel designed specifically for use in electrical applications, particularly in the cores of transformers, motors, and generators. Its primary purpose is to efficiently conduct magnetic flux with minimal energy loss, which is crucial for enhancing the performance and efficiency of electrical devices.

This steel is alloyed mainly with silicon, typically ranging from 1% to 3.5%, which significantly improves its electrical resistivity and reduces hysteresis and eddy current losses. These losses occur when the magnetic field in the steel core continuously reverses direction during operation, causing energy dissipation in the form of heat. By minimizing these losses, electrical steel helps in improving energy efficiency and reducing heat generation.

Electrical steel is produced in two main types: grain-oriented and non-grain-oriented. Grain-oriented electrical steel has a specific crystalline structure that aligns with the magnetic field, optimizing magnetic properties along one direction, making it ideal for transformers. Non-grain-oriented steel has uniform magnetic properties in all directions, suitable for rotating machines like motors.

Key Market Drivers

Rapid Growth in Renewable Energy Sector

India’s commitment to expanding its renewable energy capacity is a significant driver for the electrical steel market. With ambitious targets to achieve 500 GW of renewable energy by 2030, primarily through solar and wind power, the demand for electrical steel is surging. Electrical steel is a critical material used in the cores of generators and transformers within renewable energy infrastructure.

Solar and wind power generation rely heavily on efficient electrical machinery that converts mechanical energy into electricity with minimal loss. Electrical steel’s low core loss and excellent magnetic properties make it ideal for use in the transformers and generators that form the backbone of renewable energy plants. As India expands its renewable energy footprint, the demand for high-quality electrical steel grows accordingly. Additionally, India’s push towards cleaner energy is supported by government incentives and policies aimed at reducing carbon emissions. This green energy transition not only increases the need for new energy infrastructure but also necessitates upgrading existing power grids to handle variable renewable inputs. These grid upgrades involve the installation of more efficient transformers and motors, again boosting the need for electrical steel.

Moreover, renewable energy projects are often located in remote areas where efficiency and reliability of electrical equipment are paramount to avoid frequent maintenance and downtime. This pushes manufacturers to use high-grade electrical steel that ensures durability and optimal performance. The rise of smart grid technologies further accentuates the demand for advanced electrical steel products, as these grids require transformers and motors with enhanced electromagnetic properties. India aims to achieve 500 GW of renewable energy capacity by 2030, reflecting one of the world’s most ambitious clean energy targets.

Expansion of Electrical and Electronics Manufacturing Industry

India’s electrical and electronics manufacturing sector has witnessed significant growth over the last decade, fueled by government initiatives like “Make in India” and rising domestic consumption. This expansion plays a critical role in driving the electrical steel market, as electrical steel is a fundamental material used in the manufacturing of transformers, motors, generators, and various electrical appliances.

The rise in consumer electronics, industrial machinery, and household appliances has increased the production scale of electrical equipment that requires electrical steel cores. For instance, electric motors used in appliances like air conditioners, refrigerators, and washing machines depend heavily on non-grain-oriented electrical steel for their efficiency and durability. The sector’s growth creates a direct demand for such steel, as manufacturers aim to improve product performance while keeping costs competitive. Additionally, the industrial sector’s push towards automation and electrification increases the need for energy-efficient electric motors and transformers. Electrical steel with superior magnetic properties reduces power losses, helping manufacturers meet stringent energy efficiency standards. The government’s focus on energy conservation and the implementation of standards like the Bureau of Energy Efficiency (BEE) rating for electrical products further encourage the adoption of high-quality electrical steel.

The export potential of India’s electrical and electronics products also propels the demand for electrical steel. As Indian manufacturers compete on the global stage, they must ensure that their products meet international efficiency and quality benchmarks, often requiring advanced grades of electrical steel. Moreover, the growth of electric vehicles (EVs) and related components manufacturing is creating a new avenue for electrical steel usage. EV motors and charging infrastructure rely on high-performance electrical steel to maximize efficiency and reduce energy loss. The government’s “Make in India” initiative has led to over 1,500 new electrical and electronics manufacturing units established between 2015 and 2023, boosting domestic production capacity.

Infrastructure Development and Urbanization

India’s rapid urbanization and large-scale infrastructure development projects are significant catalysts for the electrical steel market. Urban areas require massive expansion and modernization of power distribution networks, industrial facilities, and transportation systems, all of which depend heavily on electrical steel-based components.

As cities expand and new industrial hubs are established, the demand for electrical transformers, motors, and generators escalates sharply. Electrical steel is a core material in these components because it reduces energy loss and improves efficiency, which is critical in managing the growing electricity demand of urban centers.

Government-led infrastructure initiatives such as the Smart Cities Mission aim to integrate advanced technologies into urban living. These projects often include smart grids, electric public transport, and upgraded power distribution systems, all of which require reliable electrical steel products. Smart grids, for example, use transformers and motors made from grain-oriented electrical steel to minimize losses and improve reliability, ensuring a stable power supply in densely populated areas. Additionally, large infrastructure projects like metro rail systems, airports, and industrial parks utilize vast quantities of electrical equipment. The electric motors powering escalators, elevators, and HVAC systems, along with the transformers regulating power supply, depend on electrical steel for optimal performance.

The industrialization accompanying urbanization also boosts demand. New factories, processing plants, and manufacturing units require extensive electrical infrastructure, including motors and transformers designed for high efficiency and reliability. Electrical steel’s role in minimizing operational losses makes it indispensable in this context. Furthermore, rural electrification programs aim to extend power supply to remote areas, necessitating robust and efficient electrical steel components for reliable energy distribution. This widespread infrastructure development, spanning urban and rural regions, creates sustained growth opportunities for the electrical steel market. India’s urban population is projected to reach approximately 600 million by 2030, nearly doubling from about 377 million in 2011 (Census of India), driving demand for urban infrastructure and power distribution.

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Key Market Challenges

High Production Costs and Dependence on Imported Raw Materials

One of the significant challenges confronting the India electrical steel market is the high production cost coupled with a substantial dependence on imported raw materials. Electrical steel manufacturing requires high-quality inputs such as silicon and specialized alloys, which are not abundantly produced domestically in India. This reliance on imports makes the supply chain vulnerable to global market fluctuations, currency volatility, and geopolitical uncertainties, all of which can increase the cost of raw materials unpredictably.

The manufacturing process of electrical steel is also capital-intensive and technologically demanding. Producing grain-oriented electrical steel, which is essential for transformer cores, involves complex heat treatment and cold rolling processes to achieve the required magnetic properties. Many Indian producers face technological constraints that limit their ability to manufacture this steel efficiently and at competitive costs, forcing them to rely on imports or lower-grade domestic alternatives. Furthermore, energy costs in India, particularly electricity tariffs, are relatively high compared to other steel-producing countries. Since electrical steel production is energy-intensive, this adds a significant burden to overall manufacturing expenses. Consequently, Indian electrical steel producers struggle to maintain price competitiveness against cheaper imports from countries with lower production costs, such as China and Japan.

The government has introduced some initiatives to promote indigenous manufacturing, but scaling up production to meet domestic demand remains a challenge. The lack of investment in advanced technology and automation in the electrical steel manufacturing sector restricts productivity and increases operational costs.

This cost pressure ultimately affects downstream industries like transformers and motor manufacturers, who face tighter margins and may opt for imported electrical steel, thereby limiting growth opportunities for local producers.

Addressing this challenge requires coordinated efforts, including incentivizing technology upgrades, encouraging domestic raw material exploration, and improving energy efficiency within production facilities. Additionally, strengthening the supply chain through local silicon alloy production and enhanced infrastructure could help reduce reliance on imports.

Quality Standards and Technological Gaps in Domestic Manufacturing

Another major challenge in the India electrical steel market is maintaining consistent quality standards and bridging the technological gaps in domestic manufacturing. Electrical steel requires very specific magnetic and physical properties to perform efficiently in electrical applications such as transformers, motors, and generators. Variations in quality can lead to increased energy losses, overheating, and reduced lifespan of electrical equipment.

Despite the growth in demand, many domestic manufacturers still face difficulties in producing electrical steel that matches the high precision and stringent quality required by modern electrical equipment manufacturers. This issue is partly due to limited access to advanced manufacturing technologies such as high-grade cold rolling mills, precise annealing furnaces, and state-of-the-art coating processes that enhance the steel’s magnetic performance.

The lack of uniform standards and quality control measures across the industry results in inconsistent product performance. Some producers may compromise on silicon content or coating quality to reduce costs, which negatively affects the electrical and mechanical properties of the steel. This inconsistency undermines customer confidence and limits the broader adoption of locally produced electrical steel in critical applications. Moreover, many Indian electrical steel producers have yet to invest adequately in research and development. Without continuous innovation, it is challenging to keep pace with evolving global standards or develop new grades of electrical steel that cater to emerging technologies such as electric vehicles, smart grids, and renewable energy systems.

The gap in skilled manpower also contributes to quality challenges. Producing high-grade electrical steel requires specialized knowledge in metallurgy and process engineering, which remains limited in some segments of the Indian industry.

As a result, many manufacturers in India still rely on imports of high-quality electrical steel to meet the demand for premium-grade materials. This dependency restricts the growth potential of local producers and increases the cost for downstream industries.

To overcome these challenges, Indian electrical steel manufacturers need to prioritize upgrading their production technology, enforce stricter quality standards, and invest in skill development and R&D. Collaboration with international technology partners and academia could also accelerate the adoption of best practices.

Key Market Trends

Rising Adoption of Grain-Oriented Electrical Steel for Energy Efficiency

One notable trend in the India electrical steel market is the increasing adoption of grain-oriented electrical steel (GOES), driven by growing demand for energy-efficient transformers and power equipment. Grain-oriented electrical steel has a unique crystalline structure that aligns with the magnetic flux, offering superior magnetic permeability and lower core losses compared to non-grain-oriented steel.

India’s expanding power distribution infrastructure, fueled by rising electricity consumption and renewable energy integration, demands transformers that minimize energy wastage. This trend is encouraging utilities and manufacturers to prefer GOES over traditional electrical steel grades. Energy efficiency regulations and government policies promoting reduced transmission and distribution losses further accelerate this shift.

The GOES market is gaining traction not only because of energy-saving benefits but also due to improved reliability and longer lifespan of transformers. Utilities increasingly recognize that investing in high-quality electrical steel translates into reduced operational costs and better system stability. This is especially critical for India, where grid reliability and energy losses remain pressing challenges.

Domestic producers are gradually scaling up their capacity to manufacture GOES, though imports still dominate due to technical complexities and higher production costs. Nevertheless, increased focus on localized manufacturing and technological collaborations is gradually bridging this gap.

In addition to transformers, grain-oriented electrical steel is also finding applications in emerging sectors such as electric vehicle charging stations and smart grid components, reinforcing the trend toward more efficient and sustainable electrical infrastructure.

This rising preference for grain-oriented electrical steel marks a significant advancement in India’s electrical steel market, signaling a move towards greener, more efficient power systems aligned with global energy transition goals.

Increasing Demand for Non-Grain-Oriented Electrical Steel in Motor Applications

Another prominent trend in the Indian electrical steel market is the growing demand for non-grain-oriented electrical steel (NGOES), particularly driven by the expanding electric motor and appliance sectors. Unlike grain-oriented steel, NGOES has uniform magnetic properties in all directions, making it suitable for rotating machines like motors and generators.

India’s rapid industrialization and urbanization have significantly increased the use of electric motors in various sectors, including manufacturing, agriculture, HVAC systems, and household appliances. The government’s push for industrial electrification and energy-efficient motors has intensified the demand for high-quality NGOES that reduces losses and enhances motor efficiency.

The electric vehicle (EV) market, although still in early stages, is emerging as a key growth area for NGOES consumption. EV motors require electrical steel with superior magnetic and mechanical properties to ensure optimal performance and durability. As EV adoption accelerates, this will drive further demand for specialized grades of NGOES tailored for automotive applications. Additionally, energy efficiency regulations targeting motor-driven equipment encourage manufacturers to adopt better quality electrical steel to meet stricter standards. This regulatory pressure is prompting upgrades in material specifications and manufacturing processes, benefiting the NGOES segment.

Manufacturers are increasingly investing in process improvements, such as improved coating technologies and advanced annealing, to enhance the performance of NGOES products. This trend reflects the market’s move toward higher quality and more specialized electrical steel products.

In summary, the increasing use of non-grain-oriented electrical steel in motors and other rotating machines highlights an important market trend, fueled by industrial growth, electrification, and emerging technologies like electric vehicles.

Segmental Insights

Type Insights

The Non-Grain Oriented Electrical Steel held the largest market share in 2025.  Non-Grain Oriented Electrical Steel (NGOES) dominates the India electrical steel market primarily due to its versatility and extensive applications across multiple sectors. Unlike Grain Oriented Electrical Steel (GOES), which is primarily used in static machines like transformers, NGOES is used in rotating electrical machines such as motors, generators, compressors, and a wide range of consumer appliances. These applications are more numerous and widespread in both industrial and residential sectors, contributing to its larger share in the market.

India’s fast-paced industrialization, growing urban population, and increasing demand for electric appliances have significantly driven the use of NGOES. Appliances such as air conditioners, washing machines, refrigerators, fans, and industrial machines all rely on electric motors made using NGOES. The expanding automobile industry, especially the rise of electric vehicles (EVs), further accelerates this trend. EV motors require high-quality NGOES for optimal efficiency and performance, making it a critical material in India’s emerging EV ecosystem. Additionally, NGOES is easier and more cost-effective to manufacture compared to GOES. It does not require the complex grain alignment and heat treatment processes that GOES demands, which makes it more suitable for high-volume, large-scale production. Indian manufacturers, many of whom are still developing advanced capabilities for GOES, are more equipped to produce NGOES domestically.

The push for energy-efficient motors under government initiatives and industrial energy-saving regulations is boosting demand for high-performance NGOES. As industries and consumers shift toward more efficient technologies, the demand for improved electrical steel in motors continues to grow.

Application Insights

The Motors & Generators held the largest market share in 2025.  Motors and Generators dominate the India Electrical Steel market primarily due to their extensive and diverse application across industrial, commercial, and residential sectors. Non-Grain Oriented Electrical Steel (NGOES), which is widely used in these machines, forms the backbone of many electric and electromechanical systems, driving the overall demand in the market.

India's rapid industrialization and infrastructure development have led to a significant rise in the usage of electric motors in sectors such as manufacturing, construction, HVAC (heating, ventilation, and air conditioning), agriculture, and transportation. From conveyor belts in factories to water pumps in agriculture and compressors in air conditioning units, electric motors are indispensable. These applications rely on NGOES because of its magnetic properties in multiple directions, making it ideal for rotating components like stators and rotors.

The increasing urban population and rising middle-class income have fueled demand for consumer appliances such as washing machines, refrigerators, and fans—all of which contain electric motors. This growing consumer base contributes heavily to the continuous consumption of electrical steel in the form of NGOES.

Another key factor is the accelerating shift towards electric vehicles (EVs) and automation. EV motors require high-efficiency electrical steel to minimize energy loss and extend driving range. As India pushes for EV adoption, the need for motors—and thus NGOES—will only intensify. Furthermore, power generation from renewable sources like wind and hydro also involves large-scale use of generators. These systems require high-performance electrical steel to ensure consistent output and operational efficiency, especially in demanding environments.

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Regional Insights

South India held the largest market share in 2025. South India holds a dominant position in the Indian electrical steel market due to a combination of industrial concentration, infrastructure development, and favorable economic policies. The region is home to several major manufacturing hubs, particularly in Tamil Nadu, Karnataka, and Telangana, which host a dense network of industries producing electrical equipment, appliances, transformers, and motors — all of which require electrical steel as a core component.

One of the key reasons for this dominance is the strong presence of the electrical and electronics industry in South India. Cities like Bengaluru, Chennai, and Hyderabad are well-established centers for electrical machinery, industrial automation, and electronics manufacturing. These industries are among the primary consumers of both grain-oriented and non-grain-oriented electrical steel. Additionally, South India has seen rapid urbanization and infrastructure development, including metro rail projects, industrial corridors, IT parks, and smart city initiatives. These projects require extensive power distribution and efficient electrical systems, increasing the demand for high-quality electrical steel in the region.

The proactive state governments in South India have also played a significant role by offering attractive industrial policies, ease of doing business, and incentives for setting up manufacturing units. This has led to the establishment of several domestic and multinational companies in the region, strengthening the supply chain for electrical steel. Furthermore, South India’s better logistics connectivity through well-developed ports like Chennai, Ennore, and Cochin facilitates both import of raw materials and export of finished goods, supporting the growth of the electrical steel market.

Recent Developments

• In February 2025, JSW Steel and JFE have successfully completed the acquisition of Thyssenkrupp’s electrical steel business in India. This strategic move strengthens JSW Steel’s position in the high-quality electrical steel segment, enhancing its product portfolio and market reach. Partnering with JFE, a global leader in electrical steel technology, allows JSW Steel to leverage advanced expertise and manufacturing capabilities. The acquisition is expected to boost India’s domestic electrical steel production, supporting growing demand from power and automotive sectors while reducing reliance on imports.
• In January 2025, India has launched a new steel Production-Linked Incentive (PLI) scheme with a total outlay of USD 500 million to boost domestic steel manufacturing. The scheme aims to encourage investment in advanced steel technologies, increase production capacity, and promote value-added steel products. By incentivizing manufacturers, the initiative seeks to reduce import dependence, enhance competitiveness, and support the growth of the steel sector. This move aligns with the government’s broader goal of strengthening India’s manufacturing base and achieving self-reliance in strategic industries.

Key Market Players

• Tata Steel Limited
• JSW Steel Limited
• Jindal Steel and Power Limited
• Steel Authority of India Limited (SAIL)
• Essar Steel India Limited
• Electrosteel Steels Limited
• VISA Steel Limited
• Bhushan Steel Limited

Report Scope:

In this report, the India Electrical Steel Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Electrical Steel Market, By Type:

o   Grain Oriented Electrical Steel

o   Non-Grain Oriented Electrical Steel

• India Electrical Steel Market, By Application:

o   Transformers

o   Motors & Generators

o   Inductors

• India Electrical Steel Market, By Vertical:

o   Automotive

o   Construction

o   Manufacturing

o   Energy & Power

o   Others

• India Electrical Steel Market, By Region:

o   South India

o   North India

o   West India

o   East India

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Electrical Steel Market.

Available Customizations:

India Electrical Steel Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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