Steel
India has become the world's fourth-largest producer of crude steel.

Steel Industry in India

Latest update: July, 2014

Market value of the Indian steel sector

In 2011, the Indian steel sector’s total market value was US$ 57.8 billion.

Market value of the Indian steel sector

Sector-wise steel consumption in India

Infrastructure is India’s largest steel consumer, accounting for 63 per cent of total consumption in FY11.

Sector-wise steel consumption in India

Value of India’s metals and mining industry

India’s metals and mining industry recorded a strong 19.8 per cent expansion in 2011 to touch US$ 141.9 billion.

Value of India’s metals and mining industry

Contribution in global crude steel production

India is the world’s fourth-largest producer of crude steel (2012), with a global share of 5.1 per cent.

Contribution in global crude steel production

Updated: July, 2014

SECTORAL REPORT | April, 2014

METALS AND MINING SECTOR REPORT | April, 2014

Introduction

Steel is crucial to the development of any modern economy and is considered to be one of the backbones of human civilisation. The level of per capita consumption of steel is treated as an important index of the level of socio-economic development in a country.

From only three steel plants, a few electric arc furnace-based plants and a mere one million tonne (MT) capacity status at the time of Independence, India is now the fourth largest crude steel producer in the world and the largest producer of sponge iron.

Presently, steel contributes to nearly two per cent of the gross domestic product (GDP) and employs over 500,000 people. The total market value of the Indian steel sector stood at US$ 57.8 billion in 2011 and is expected to touch US$ 95.3 billion by 2016. India's per capita steel consumption stood at 57.8 kilograms in 2013, according to a World Steel Association report and is expected to rise with increased industrialisation throughout the country.

Market size

India is slated to become the second-largest steel producer in the world by 2015. Steel production in the country has increased at a compound annual growth rate (CAGR) of 6.9 per cent over 2008-2012.

India's real consumption of total finished steel grew by 0.6 per cent year-on-year in April-March 2013-14 to 73.93 MT, according to the Joint Plant Committee (JPC), Ministry of Steel.

Increasing demand by sectors such as infrastructure, real estate and automobiles at home and abroad has put India on the world map. The construction sector accounts for around 60 per cent of the country's total steel demand while the automobile industry accounts for 15 per cent.

Investments

The steel industry and its related metallurgy and mining industries have witnessed quite a few investments and developments in the recent past. Some of the notable investments are as follows:

  • L&T Special Steels and Heavy Forgings have entered into a five-year technology transfer agreement with Japan Steel Works. This agreement covers transfer of critical technology for steel-melting and heavy forgings made from ingots weighing up to 200 tonnes and for the hydrocarbon and thermal power sectors.
  • JSPL Group has commissioned a greenfield 2 MT steel plant in Sohar, Oman at an investment of US$ 800 million. The greenfield unit will be one of the largest steel plants in the Gulf region.
  • Steel Authority of India Ltd (SAIL) has secured contracts for supplying over 117,000 tonnes of rails after successful bids for two global tenders floated by Rail Vikas Nigam Ltd (RVNL), for major upcoming passenger rail line projects in India.
  • JSW Steel plans to commissiona Rs 4,500 crore (US$ 748.55 million) cold rolling mill (CRM) at its integrated steel plant in Torangal, Karnataka. The unit, which will produce high-strength auto-grade steel, has an installed capacity of 2.3 million tonnes per annum (MTPA).

JSW Steel is also set to acquire WelspunMaxsteel for about Rs 1,100 crore (US$ 182.98 million) in a move aimed at sourcing cheaper raw material, bringing down production cost and enhancing its presence in the northern and western markets.

  • Canada has invited Coal India Ltd (CIL) to explore mining opportunities in British Columbia, as per Mr Stewart Beck, Canadian High Commissioner in India.

Government Initiatives

Ministry of Steel, Government of India, is considering setting up a strong research and development (R&D) mission/centre, virtual or otherwise, to step up innovative research and technology development in the country's steel industry.

The Centre's Steel Development Fund (SDF) and Plan Scheme presently provide financial assistance for R&D in the sector. Under the SDF scheme, 82 R&D projects have been approved with total project cost of Rs 677 crore (US$ 112.61 million) where in SDF assistance is Rs 370 crore (US$ 61.54 million). Under the Plan Scheme, eight projects have been approved with a total cost of Rs 123.27 crore (US$ 20.51 million) where in government assistance is Rs 87.28 crore (US$ 14.51 million).

In order to increase industrial activity, the Government of India, through the Ministry of Steel, has signed Memorandums of Understanding (MoUs) with all the major steel producing Public Sector Undertaking (PSU) companies such as SAIL and Rashtriya Ispat Nigam Ltd (RINL). These will help to direct the companies to achieve targets and benefit the sector as a whole.

Road Ahead

The liberalisation of the industrial policy and other initiatives taken by the government have spurred the growth of the private sector in the steel industry. While the existing units are being modernised or expanded, a large number of new steel plants have also come up in different parts of the country based on cost-effective and state of-the-art technologies. In the last few years, the rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up fresh greenfield projects in different states of India.

With the increase in global population, there is a greater need for steel to build public-transport infrastructure. Emerging economies will continue to drive demand as these countries require a significant amount of steel for urbanisation and industrialisation purposes. India's steel sector is anticipated to witness investment of about Rs 2 trillion (US$ 33.26 billion) in the coming years, as per Tata Steel.

Exchange Rate: INR 1 = US$ 0.0166 as on July25, 2014

References: Media reports, Press Releases, Press Information Bureau, Department of Industry Policy and Promotion, Ministry of Steel, Confederation of Indian Industries

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

PROVEN METTLE IN STEEL

India is tyhe world's largest producer of crude steel, and is currently doubling its production capacity.

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine


India Now Business and Economy

English

+ More Publications >

IBEF Publication

Perspectives More

Loading...
Loading blogs ...

ideas More

Ideas

For the Fun of It
A design product startup wins hearts by creating high on fun quotient offerings.

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password

Copyright © 2010-2015 India Brand Equity Foundation

All material, information, data, images or content on this website is subject to copyright or other applicable intellectual property laws and no part of it can be reproduced in any form (including paper or electronic form) without prior written consent and approval from IBEF. Infringements are subject to prosecution under the applicable laws. For consent related queries and conditions,
please write to info.brandindia@ibef.org

IndiaAn initiative of the Ministry of Commerce & Industry, Government of India