Budget 2026 Expectation: What Budget 2026 could mean for India’s metals industry

Budget 2026 metals industry

• India's metals sector requests cost relief, mining reforms, and stable policies in 2026.
• High costs and import reliance threaten competitiveness despite strong demand.
• Industry calls for lower duties on critical minerals, more private mining involvement

Did our AI summary help?

As Budget 2026 approaches, India’s metals industry enters the new fiscal year with a rare combination of visibility and vulnerability. Demand outlook remains firm, supported by government-led infrastructure spending and the energy transition. Yet, rising costs, import dependence and policy uncertainty continue to weigh on competitiveness, sharpening expectations from this year’s Budget.

Demand is not the concern

The Economic Survey projects steel demand growth of 9-10 percent, anchored by capital expenditure of Rs 11 lakh crore, equivalent to 3.2 percent of GDP. Roads, railways, including 5,364 km of high-speed corridors, and urban housing together account for nearly 69 percent of steel consumption. This trajectory aligns with India’s ambition to scale steel capacity to 300 million tonnes by 2030.

Beyond steel, aluminium and copper demand is expanding alongside electric vehicle infrastructure, renewable energy targets of 500 GW and the rapid rollout of solar parks. Industry experts say, with India already ranking among the top three global solar markets, metal intensity across power and mobility infrastructure is set to rise steadily.

Costs and supply risks dominate expectations

Despite this demand momentum, cost pressures remain acute. India continues to import 100percent  of critical minerals such as lithium and cobalt, leaving producers exposed to global volatility. Low beneficiation rates, under 20percent  for iron ore compared to global norms of around 80percent ,further force reliance on high-grade imports, often at premiums of Rs 5,000 to Rs 7,000 per ton.

Lt Col Rochak Bakshi (Retd), CFP, says "Budget 2026 could address some of these challenges through duty rationalisation. Rationalising import duties to zero on critical minerals like lithium and cobalt could help reduce dependency and ease cost pressures.”

In addition, mining royalties ranging from 15 percent to 18 percent contribute to double taxation, translating into effective cost increases of nearly 25 percent in the absence of reform. The industry is also seeking a mining policy overhaul that allows greater private participation in copper and silver extraction to improve domestic supply security.

Balancing protection and competitiveness

The debate over safeguard duties has resurfaced, particularly in the steel sector, amid concerns over dumping. However, the Economic Survey cautions that excessive protectionism could inflate industrial costs and weaken downstream competitiveness.

Bakshi warns that delayed reforms may worsen raw material shortages just as demand accelerates. “Over-protectionism risks raising costs and eroding competitiveness at a time when global supply risks are already elevated,” he says.

Why policy stability matters in Budget 2026

Policy predictability emerges as a broader theme across metals, including gold. Mahendra Luniya, Founder and Chairman of Vighnaharta Gold Ltd, points out "frequent changes in import duties tend to distort domestic pricing without reducing demand. A stable and rational duty framework would bring predictability and align domestic prices more closely with global benchmarks."

Luniya adds, "encouraging formal, traceable gold investments, such as regulated and digital gold, can channel household savings into the formal economy while maintaining demand sentiment."

For the metals industry as a whole, Budget 2026 is less about announcements and more about execution. With demand already locked in, the sector is looking for cost rationalisation, mining reforms and stable policy signals that allow Indian metal producers to grow competitively in an increasingly uncertain global environment.