Tata Steel goes all in on the domestic market, with acquisitions, expansion plans

The Odisha-based company operates a 4 million tonne per annum (MTPA) pellet plant at Jajpur. The deal complements Tata Steel’s recent ramp-up of its Kalinganagar capacity to 8 MTPA and comes alongside an in-principle approval to expand its subsidiary Neelachal Ispat Nigam Ltd (NINL) to 4.8 MTPA from 1 MTPA.

Expanding long steel portfolio

In a statement, Tata Steel said expanding its long steel portfolio would be a major focus area, with analysts noting that the company already has a strong position in flat products but needs to accelerate growth in long products — the segment heavily used in railways, road construction, housing and other infrastructure projects. Rival producers such as Jindal Steel have gained significant ground in this space amid the government’s large capital expenditure cycle.

“This is Phase 1 of the capacity expansion in NINL and will enable Tata Steel to further expand the long products portfolio, especially in the highly profitable retail space, and capitalise on the growth of the construction sector in India through new products and solutions,” the company said.

The balance holding in Thriveni Pellets lies with Lloyds Metals and Energy Ltd (LMEL), with whom Tata Steel has already signed a wide-ranging pact, covering mining, logistics and steelmaking opportunities in Maharashtra. The arrangement includes collaboration on a proposed 6 MTPA steelmaking facility, concession-based iron ore mining operations and associated infrastructure development.

The partnership with LMEL is particularly significant for Tata Steel’s raw material security. Analysts point out that the company is at a relative disadvantage compared to peers such as JSW Steel and Jindal Steel, as a majority of its operating mining leases expire in 2030. According to Kotak Securities, post-2030, Tata Steel’s captive iron ore mines will meet only 31 percent of its requirements — a sharp drop that could compress operating margins by 30–40 percent from FY31, especially given the steep premiums quoted in recent mining auctions.

Demand for iron ore is expected to rise further as NINL undergoes its planned expansion and Tata Steel progresses on scaling its legacy Jamshedpur operations. The company is also working on a 1 MTPA demonstration plant in Jamshedpur that will produce steel using the low-carbon HIsarna technology, part of its broader decarbonisation roadmap.

Overseas challenges persist

The renewed India-first strategy also reflects continued challenges across Tata Steel’s international footprint. The company has significant exposure in Europe through operations in the Netherlands and the UK — regions that remain weak on the demand front. According to the World Steel Association, steel demand in the EU and the UK, combined, is expected to grow just 1.3 percent in 2025, weighed down by geopolitical tensions, fiscal constraints and lingering overcapacity following the Russia–Ukraine conflict.

A modest recovery to 3.2 percent growth is forecast for 2026 as governments revive infrastructure spending.

US tariff policies remain an additional source of uncertainty for global steelmakers. While Tata Steel says its India operations are largely insulated from the tariff environment, the company noted that it is recalibrating its export strategy from its UK and Netherlands units. The management has indicated that routing some US-bound shipments through the UK may help reduce tariff exposure.

With domestic demand rising and global conditions still unsettled, analysts say Tata Steel’s recent strategic moves underscore a clear pivot: building scale, securing iron ore and expanding product capability in India are now central to the company’s next phase of growth.