Introduction: Indian Steel Industry
The Indian steel industry has witnessed steady growth, on the back of various initiatives taken by the Government of India. The soaring demand from different sectors, such as, infrastructure, real estate and automobile has put the steel industry in India on the world map.
Economic reforms initiated by the government in 1991 have assisted in the growth of steel industry. Prior to the reforms, the steel industry was dominated by the public sector. However, after the reforms this sector became open to private investments and foreign investments. The 1991 reforms allowed for no licenses to be required for capacity creation, except for some locations. A lot of new steel plants have been set up in the country due to huge foreign investments and state-of-the-art technology. Tata Steel was the first steel plant established in 1907 in India. Some of the other steel plants in the country include Bhilai Steel Plant at Chattisgarh, Rourkela Steel Plant at Orissa, Durgapur Steel Plant at West Bengal to name a few. In 2010, India was ranked as the fourth largest producer of steel by the World Steel Association.
The Indian steel industry began expanding into Europe during the 21st century. In January 2007, Tata Steel made a successful US$ 11.3 billion offer to acquire European steel maker Corus Group PLC. In 2006, Mittal Steel acquired Arcelor for US$ 38.3 billion to become the world's biggest steel giant.
Some of the growth drivers helping the sector to grow are:
Steel industry is of great significance to the economic growth of the country. India has been ranked the world’s fifth largest producer of crude steel in 2009 and is projected to become the world’s second largest producer by 2015–2016, with a production volume of 54.5 million tonnes (MT). Various states have signed around 222 memorandums of understanding (MoUs), with a projected capacity of about 275.7 MT and an investment of more than US$ 229 billion.
The steel production capacity is likely to reach 124 MT by 2011–12. In 2008–09, the installed capacity for crude steel was estimated at 64.4 MT, while production was estimated at 54.5 MT, resulting in an 85 per cent capacity utilisation. Long-products constituted 57 per cent of the total finished steel consumption, while the remaining 43 per cent was constituted by flat-products in 2007–08.
The Eleventh Five Year Plan (2007–2012) has allocated investments worth US$ 490 billion for the infrastructure sector, comprising power, roads, highways, railways, ports, airports, mining and irrigation. Steel giants such as JSW Steel and Tata Steel are investing to enhance the capacities of products such as TMT bars (rebars) and many more.