India's steel consumption grew 7.7% from a year earlier in the first four months of the financial year, outstripping growth in the country's gross domestic product between April and June.
Domestic consumption reached 24.37Mt from April to July, according to government data.
India's GDP grew 5.5% during the April-June quarter, a small improvement from 5.2% in the previous quarter but well below the 8-9% target figure.
Strong expansion in construction likely boosted steel demand.
According to GDP data, construction expanded 10.9% in the first fiscal quarter. The manufacturing sector, another key consumer of steel, remained sluggish with production up just 0.2% between April and June.
India's steel imports rose 36% to 2.56Mt during April-July.