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Rating agency ICRA in its latest report has said that the demand for finished steel in India is expected to grow 8 per cent in 2022 as compared to 2021. It said supported by the government's infrastructure-led growth model, domestic finished steel demand has registered a double-digit growth of 11.9 per cent in the first eight months of the current fiscal.

However, ICRA said domestic steel companies ‘face a bumpier road ahead’ as the external environment becomes more challenging due to elevated inflation/ energy prices and rising interest rates.  It also said given the expectation of a slowdown in the pace of economic activity over the next few quarters, domestic steel demand growth is likely to moderate to 6-7 per cent in FY24.

It further said dependence on external financing to meet committed expansion plans is likely to increase going forward. A gradual increase in the steel industry's borrowing levels has already been noticed during the first half of ongoing FY23.