Trade Analytics

This is the ARCHIVED section of the website. To visit the current content of the website please CLICK here


Go Back


October, 2011


The Indian steel industry plays an important role in the country's economic growth. The country has also gained an important position on the global steel map due to its giant steel mills, acquisition of global scale capacities by players, continuous modernization & up gradation of old plants, improving energy efficiency, and backward integration into global raw material sources. Global steel giants from across the globe have shown keen interest in the steel industry due to its phenomenal performance. 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 the year 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.

India is the world's fourth largest producer of iron ore. It has about 25 billion tonnes of good quality iron ore reserves—the sixth-highest in the world—with a reserves base of 9.8 million. Although lower than Brazil and Australia, this is considered abundant and is one of the important advantages of India's domestic steel industry.

Seeing the growth potential of the steel industry in India, many global steel players have been planning to enter the market or have announced their expansion plans for their Indian businesses. Arcelor Mittal and POSCO have planned mega Greenfield projects at various locations in India. Some other global players have aslo also entered strategic partnerships or joint ventures (JV) with Indian steel giants to capitalize on their existing client base in the region.

Government Initiatives

  • The industrial policy that was announced in July 1991, removed iron and steel from the list of industries reserved for the public sector and was also exempted from the provisions of compulsory licensing under the Industries (Development and Regulation) Act, 1951
  • From May 24, 1992 the iron and steel industry was included in the list of ‘high priority' industries for automatic approval for foreign equity investment up to 51 per cent and this limit has since been raised to 100 per cent
  • Pricing and distribution of steel were deregulated from January, 1992. Additionally, it was ensured that priority continued to be accorded for meeting the requirements of small-scale industries, exporters of engineering goods and North Eastern region, in addition to strategic sectors such as Defence and Railways
  • The import regime for iron and steel has undergone major liberalisation. This has been made possible by total freeing of iron and steel imports from licensing, canalization and lowering of import duty levels. Export of iron and steel items has also been freely allowed
  • Duties on raw materials for steel production were reduced. These measures reduced the capital costs and production costs of steel plants
  • Freight equalization Scheme was withdrawn in January, 1992 - with the coming up of new steel plants in different parts of the country, iron and steel products are freely available in the domestic market
  • Currently, the import duty on steel items is 5 per cent. The import duty on raw materials like melting scrap, coking coal, metcoke is NIL and for other raw materials such as Zinc, Iron Ore and Ferro Alloys it ranges from 2 per cent to 5 per cent. There is no export duty on any steel items. However, Government has imposed ad-volorem export duty of 15 per cent on iron ore lumps and 5 per cent ad-volorem export duty on iron ore fines in order to conserve the mineral for long term requirements of the domestic steel industry
  • Excise duty for steel is currently 10 per cent
  • To ensure sufficient domestic availability and curb the rising price of hot-rolled coils in the domestic market, its imports have been freed by the government.


China Steel Corporation (CSC), one of the largest integrated steel makers in Taiwan, together with its co-investors, will invest US$ 178 million in a new plant to produce electrical steels in Bharuch district of Gujarat, according to Francis Kuo-Hsin Liang, Vice-Minister, Ministry of Economic Affairs, Taiwan.

Tata Steel is planning to set up a six million tonne (MT) steel plant The proposed six million tonne (MT) steel plant which Tata Steel is setting up at Kalinga Nagar, Orissa, will concentrate entirely on flat steel products, catering to the needs of the automotive industry and white goods. The first phase of this plant is expected to be operational by February 2014 and will see a total investment of up to Rs 25,000 crore (US$ 5.02 billion) of which the steel maker has already invested over Rs 10,000 crore (US$ 2 billion).

RINL, the corporate entity that runs the Vizag steel plant, has inaugurated a series of auxiliary units to expand its plant's capacity to 6.3 MT The project has been executed by Instrumentation Ltd, Kota and involved a cost of around Rs 10 crore (US$ 2.25 million).

Varia Engineering Works Pvt Ltd, Ahmedabad-based rolling mills manufacturing company, is setting up India's first 6-stand continuous cold rolling mill for stainless steel.

Road Ahead

According to the latest report by RNCOS titled "Indian Steel Industry Outlook to 2012", the Indian crude steel production will grow at a compound annual growth rate (CAGR) of around 10 per cent during 2010-2013. Moreover, the Government is proactively providing incentives to boost economic growth by injecting funds in various industries, such as construction, infrastructure, automobile, and power will drive the steel industry in future. The report also shows that, steel consumption in India is expected to grow considerably in coming years as per capita finished steel consumption is far less than its regional counterparts.

References: RNCOS, Media reports, IBEF, Ernst & Young, Ministry of Steel

Exchange Rate As on October 24, 2011: INR 1 = US$ 0.02006