Budget 2025: How It will Impact the Steel, Chemical, Polymer and Non-Ferrous Markets

The Union Budget 2025-26 has introduced several policy measures that are going to affect industries that rely on raw materials like steel, chemicals, polymers, and non-ferrous metals. Some parts of the budget have good news for manufacturers. The Central Government has planned capital expenditure increases, customs duty changes, and several other measures to provide relief to manufacturers and improve domestic production. However, shifting priorities and budget cuts in some areas might also make things more difficult.

Let’s have a closer look at the key announcements of Union Budget 2025-26 across steel, chemicals, polymers, and non-ferrous metal industries, along with their expected impact.

Steel Industry: Budget 2025 Key Announcements & Impact

• Capital expenditure boost: 10% increase in Capex outlay to ₹11.2 lakh crore, ensuring continued infrastructure growth.
  • Impact: Increased demand for steel in roads, railways, bridges, smart cities, and industrial hubs.
• Urban Challenge Fund: ₹1 lakh crore allocated for urban infrastructure projects.
  • Impact: More demand for steel-based structures.
• Shipbuilding incentives: Exemption on basic customs duty for shipbuilding materials extended for 10 years.
  • Impact: Lower costs for shipbuilders, boosting steel demand.
• Customs duty on steel products: No major changes in duty structures; flat-rolled stainless steel duties adjusted but effective tariffs remain the same.
  • Impact: Limited change in import competition or pricing.
• Potential risks: While the budget maintains capital expenditure for roads and railways, the real allocations to these sectors have shrunk when adjusted for inflation. This could slow demand for steel in the long run.

Chemical Industry: Budget 2025 Key Announcements & Impact

• National Manufacturing Mission: Support for clean-tech manufacturing, including solar PV cells, EV batteries, and electrolyzers.
  • Impact: Boost for specialty and industrial chemicals.
• Fertilizer sector boost: New urea plant with 12.7 LMT annual capacity at Namrup, Assam.
  • Impact: Increased demand for raw materials used in fertilizers.
• Infrastructure growth & chemicals: A 3-year PPP project pipeline will drive demand for construction chemicals.
• Toy Industry Growth Plan: Implementation of the National Action Plan for toys.
  • Impact: Increased use of speciality chemicals in toy manufacturing.
• MSME support measures: Enhanced credit, export promotion, and cross-border factoring support for MSME manufacturers.
  • Impact: Positive for smaller chemical manufacturers.

Polymer Industry: Budget 2025 Key Announcements & Impact

• EV battery manufacturing push: 35 capital goods used in lithium-ion battery production exempted from import duty.
  • Impact: Increased demand for polymer-based components in EVs.
• Customs duty exemption on critical minerals: Includes lithium-ion battery waste, cobalt powder, and other essential materials.
  • Impact: Lower raw material costs for polymer-based energy storage solutions.
• PLI scheme support for auto components: Encourages local production of polymer-based auto parts.
• Easing import tariffs: India's average import tariff cut from 13% to 11%, reducing duties on nearly 30 essential goods.
  • Impact: Cheaper imports of polymer raw materials.

Non-Ferrous Metal Industry: Budget 2025 Key Announcements & Impact

• Removal of Customs Duty on Waste & Scrap: Exemption for key non-ferrous metals like copper, zinc, lead, and tungsten.
  • Impact: Cost reduction for secondary and recycling-based manufacturers. Lowering input costs will enhance domestic production and reduce forex impact on MSMEs.
• Capital expenditure & infrastructure: Increased spending on urban infrastructure, maritime fund, and airport development.
  • Impact: Higher demand for aluminium, copper, and other non-ferrous metals in construction and transportation.

Conclusion

The Union Budget 2025–26 presents a lot of opportunities for industries reliant on raw materials. Increased capital expenditure, infrastructure development, and customs duty exemptions will boost demand for steel, cement, non-ferrous metals, and specialty chemicals. However, on the other hand, shifting budget allocations and stagnant steel import duties have left some sectors expecting more.

Overall, the government’s focus on green energy, manufacturing, and self-reliance will help the long-term growth of industries in India. However, businesses will need to keep up with evolving policies and market dynamics to fully capitalize on these changes.

As businesses adjust to the new budget framework, the coming months will reveal the true impact of these measures on India’s raw materials sector.