The steel sector is one of the most crucial sectors in the development of a nation and is considered as the backbone of civilisation. The level of per capita consumption of steel is an important determinant of the socio-economic development of the country.
The Indian steel industry has entered a new development stage since 2007–08 and is riding on the resurgent economy and the growing demand for steel. India’s 33 per cent growth in steel production in the last five years was second only to China among the top five steel producing nations, according to data by World Steel Association (WSA).
India is the fourth largest producer of crude steel and the largest producer of soft iron in the world. Presently, the Indian steel industry employs around 500,000 people while the per capita consumption in 2013 stood at around 57.8 kilograms. However, these figures are expected to rise with increased industrialisation throughout the country.
According to the data released by Department of Industrial Policy and Promotion (DIPP), the Indian mining and metallurgical industries attracted foreign direct investments (FDI) to the tune of US$ 1,467.88 million and US$ 8,267.99 million, respectively, in the period April 2000–August 2014.
The Indian steel industry is divided into primary and secondary sectors. The primary sector comprises a few large integrated steel providers producing billets, slabs and hot rolled coils. The secondary sector involves small units focused on the production of value-added products such as cold rolled coils, galvanised coils, angles, columns, beams and other re-rollers, and sponge iron units. Both sectors cater to different market segments.
Companies such as Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL) and NMDC Ltd are responsible for the bulk of the production in the public sector, while companies such as Tata Steel, JSW Steel and Essar Steel are some of the big names in the private sector of the Indian steel industry.
Steel production in the country has increased at a compound annual growth rate (CAGR) of 6.9 per cent over 2008–2012. The infrastructure sector accounts for close to 60 per cent of the country's total steel demand while the automobile industry accounts for 15 per cent.
The steel industry and its associated mining and metallurgy has seen a number of major investments and developments in the recent past. Some of them are as follows:
The Government of India plans to set up a steel plant under SAIL at Bayyaram in Khamman District of Telangana, according to Mr Narendra Singh Tomar, Union Minister of Steel and Mines. A feasibility study is already underway and soon after its completion, a site would be selected for plant and funds allocation.
Some of the other recent government initiatives in this sector are as follows:
In addition, the Government of India has picked up pace in giving several projects environmental clearances, as it seeks to reboot the investment flow in the country. The clearances were given for key projects such as coal mining at Chhatrasal for Sasan Power and Mahanadi for Coal India. This move will significantly help in enhancing the Indian steel sector.
The recently released Union Budget 2014–15 has paved the way for the development of the Indian steel sector with proposals for the construction of 100 smart cities and changes in the MMRD Act. Also, India’s ranking in the global list for production of crude steel is all set to improve with increasing demand for domestic consumption in the years to follow. As per Tata Steel, India's steel sector is anticipated to witness investment of about Rs 2 trillion (US$ 32.68 billion) in the coming years.
Exchange Rate: INR 1 = US$ 0.0163 as on October 28, 2014
References: Media reports, Press Releases, Press Information Bureau, Department of Industry Policy and Promotion, Ministry of Steel, Confederation of Indian Industries