India is currently the fourth largest producer of crude steel in the world and is expected to become the second largest in the near future. The total market value of the Indian steel sector stood at US$ 57.8 billion in 2011 and is predicted to touch US$ 95.3 billion by 2016. The sector contributes to nearly 2 per cent of the gross domestic product (GDP) and employs over 500,000 people.
Being a core sector, the steel industry reflects the overall growth of an economy in the long term. The demand for steel is also derived from other sectors such as automobiles, consumer durables and infrastructure. The Indian steel sector enjoys advantages of domestic availability of raw materials and inexpensive labour. Iron ore is also available in abundant quantities, providing a major cost advantage to the domestic steel industry.
The liberalisation of industrial policy and other initiatives taken by the Government of India have given a definite impetus for entry, participation and 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 modern, cost-effective, state of-the-art technologies.
India’s real consumption of total finished steel stood at 53.789 million tonnes (MT) during April–December, 2013. Production for sale of the finished steel was 60.446 MT, registering a growth of 5.2 per cent during the period owing majorly to growth in production by major producers such as Steel Authority of India Ltd (SAIL), Tata Steel and Rashtriya Ispat Nigam Ltd (RINL).
Total steel production in India recorded a growth rate of 3.5 per cent during the period October 2012–October 2013. “Production of steel in India is expected to reach 149 MT by the end of the 12th Five Year Plan period,” as per Shri G Mohan Kumar, Secretary, Ministry of Steel.
India's iron ore pellet exports have grown by almost 11 times to 435,000 tonnes during April–October 2013–14, as compared to 40,000 tonnes exported in 2012–13. The industry expects the total exports of pellets during the current financial year to touch a level of 800,000 tonnes. At present, 36 pellet plants are operating in India, with a combined capacity of 63 million tonnes per annum (MTPA). Total expected capacity expansion and new plants together will add another 72 MT capacity by 2016–17.
India needs to invest US$ 210 billion over the next decade to achieve the steel production capacity of 300 MTPA by 2025 from the current 90 MT, according to Mr C S Varma, Chairman and Managing Director, Steel Authority of India (SAIL). Some of the major investments in the sector are as follows: