India’s JSW Steel and South Korea’s POSCO have announced plans to jointly invest ?650 billion (~$7.73 billion) in constructing a steel plant in Odisha. The plant, which will have an initial capacity of 5 million tons of steel annually, is part of their strategy to tap into India’s rapidly growing steel market, fueled by its fast-paced economic expansion.

The cooperation agreement was signed last week, although specific financial details were not disclosed. The initial investment for the project will be ?200 billion, with the plant expected to be operational by next year. Over the following three years, the plant’s capacity is set to grow to 18 million tons per year, requiring the full $7.73 billion investment.

India’s steel demand has surged in response to infrastructure expansion and rapid economic development, positioning the country as a key market for the steel industry amid declining demand in Europe and the U.S. From April to August, steel demand in India reached its highest level in seven years, driven by the construction of new plants and warehouses for large corporations.

The new facility in Odisha will produce hot-rolled, cold-rolled, and galvanized steel. This venture marks POSCO’s latest attempt to establish a large enterprise in India. A few years ago, POSCO planned a $12 billion investment—the largest foreign direct investment project in India at the time—but the project was shelved due to land acquisition challenges.

Separately, JSW Steel is also pushing forward with decarbonization efforts, planning to invest $1 billion to reduce CO2 emissions and become carbon neutral by 2050. The company aims to cut emissions by 42%, reducing them to 1.95 tons of CO2 per ton of steel by 2030.

In addition, JSW Steel recently announced its acquisition of a 67% stake in Australian coal company M Resources for $120 million, enhancing its coal reserves and supply chain.