Bhubaneswar: India’s JSW Steel and South Korea’s Posco are set to invest Rs 65,000 crore ($7.73 billion) in a planned steel plant in India over the next few years, Reuters reported.

This initiative is in line with their strategy to benefit from the surging demand for steel in India, which is currently the world’s fastest-growing major economy.

The companies signed an agreement last week to establish an integrated steel plant in Odisha, an eastern state known for its rich iron ore deposits, with an initial annual capacity of 5 million metric tons, the report said.

Although financial details were not publicly disclosed, sources revealed an initial investment of Rs 20,000 crore, with the plant expected to be operational by next year, the report said.

Over the next three years, the companies plan to increase production capacity to 18 million metric tons, bringing the total investment to $7.73 billion, sources added, Reuters reported, citing anonymous sources.

India’s rapid economic expansion and rising infrastructure investments have driven up steel demand, especially as markets like Europe and the U.S. see slower growth.

From April to August, India’s steel consumption reached its highest level in seven years.

Adding to this demand, the Indian government, along with private sector partners, plans a $12 billion investment to build and expand airports, making air travel more accessible.

According to the sources, the new JSW-Posco plant will produce hot-rolled, cold-rolled, and galvanized steel.

Posco had previously abandoned plans for a $12 billion steel plant in India, once considered the nation’s largest foreign direct investment, due to land acquisition issues, the report said.

Currently, it operates a cold-rolled and galvanized steel mill in Maharashtra, supplying automotive-grade steel to India’s leading car manufacturers.