India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world. India's metal and mining industry grew to US$ 106.4 billion in 2010, an increase of 30 per cent. Iron and steel is the largest segment of the Indian metals and mining industry, accounting for 73.8 per cent of the overall industry value followed by coal segment accounting 20.8 per cent.
Rise in infrastructure development, automotive production, power and cement industries are driving the growth in the sector. India holds a fair advantage in cost of production and conversion costs in steel and alumina. India's strategic location enables convenient exports to the developed as well as fast-developing Asian markets.
India has turned into a net importer of iron and steel due to strong growth in the manufacturing sector and rise in infrastructure projects. 100 per cent foreign direct investment (FDI) is allowed in the mining sector under the automatic route. The FDI inflow worth US$ 7.3 billion was registered into the metals and mining industry during April 2000 to February 2012. Metals and mining industry accounted for 4.5 per cent of the total cumulative FDI in the same period. In 2011, mergers and acquisitions (M&A) deal value in the mining sector stood at US$ 11.2 billion, 292 per cent higher than the corresponding figure for 2010 (US$ 2.9 billion).
There is significant scope for new mining capacities in iron ore, bauxite, and coal. Untapped metal reserves in India are to the tune of 82 billion tonnes. Strong long-term demand from the steel industry is expected to further boost the iron ore industry. Booming construction, automobiles, and packaging industries are expected to lend substantial support to the metals and mining sector.
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