9th April 2025: India’s leading metal companies, particularly in the aluminium and steel sectors, are strategically shifting their focus toward domestic expansion in light of both global trade disruptions and rising local demand. As international tariffs and volatility impact global metal markets, Indian metal producers are positioning themselves to capitalize on the country’s booming infrastructure and industrial sectors.
Impact of Global Tariffs and Domestic Growth
The imposition of a 25% tariff by the US on aluminium and steel imports has created significant price fluctuations in the global market. However, Indian companies, including Vedanta, NALCO, and Hindalco, are adapting by prioritizing domestic sales over international exports. With the Indian government’s INR 11.21 lakh crore (USD 135 billion) allocation for infrastructure projects in the 2025-26 budget, these companies are gearing up to meet the surging demand across key industries such as construction, automotive, and defense.
Vedanta’s Expansion Strategy
Vedanta, known for its diverse portfolio in aluminium, zinc, and oil, has ambitious plans to increase its domestic presence. The company is working to ramp up its aluminium production capacity to 3 million tonnes and has acquired one of Odisha’s largest high-grade bauxite mines to support its growth. The expansion of its BALCO smelter is also progressing, with commissioning expected in FY’26.
A key part of Vedanta’s strategy is to increase its share of value-added aluminium products from 60% to over 90%, tapping into the growing demand from the construction and electric vehicle (EV) sectors. With nearly half of its aluminium output already being sold domestically, Vedanta is well-positioned to benefit from India’s expanding infrastructure needs.
Hindalco’s Diversification into Copper and E-Waste
Similarly, Hindalco Industries is pursuing a diversified approach to growth. At its recent investor day, the company revealed plans to enhance its copper production capabilities, expand into e-waste recycling, and begin producing continuous copper cast rods. These initiatives are set to be commissioned within the fiscal year and are part of Hindalco’s broader strategy to tap into the growing demand for metals in India’s industrial and green energy sectors.
Outlook for the Indian Metal Sector
While the global tariff announcement initially triggered a decline in metal stock prices, the long-term outlook for domestic-focused companies remains positive. Analysts believe that companies with strong domestic operations, such as Vedanta, NALCO, and Hindustan Zinc, are better positioned to weather the volatility in international markets. As these companies are poised to benefit from India’s infrastructure push, their revenues will likely be driven by the country’s industrial growth rather than global price fluctuations.
India’s aluminium demand is forecast to grow at a compound annual growth rate (CAGR) of 7.2% through 2030, with increasing investments in electric vehicles, construction, and energy. This provides a promising backdrop for Indian metal giants as they focus on expanding their domestic footprint.
Despite the challenges posed by international tariffs, India’s growing infrastructure needs present a significant opportunity for the country’s metal producers. By pivoting to serve the expanding domestic market, Indian companies like Vedanta, NALCO, and Hindalco are well-positioned to capitalize on the nation’s development and strengthen their growth in FY’26 and beyond.