India is slated to become the second-largest steel producer in the world by 2015. Steel production in India has increased at a compound annual growth rate (CAGR) of 6.9 per cent over 2008–12. Easy availability of low-cost manpower and presence of abundant reserves make India competitive in the global setup.
The total market value of the Indian steel sector stood at US$ 57.8 billion in 2011 and is anticipated to touch US$ 95.3 billion by 2016. Attracted by the growth potential of the Indian steel industry, several global steel players have been planning to enter the market. Intended steel capacity build-up in India is set to result in investments in the range of US$ 104.2 billion to US$ 208.3 billion by 2020.
In view of the sector’s changed dynamics, globally as well as domestically, the Ministry of Steel has initiated the process of drafting a new National Steel Policy to replace the existing Policy of 2005. The Government of India is encouraging private ownership for steel operations and has therefore allowed 100 per cent foreign direct investment (FDI) through the automatic route in the Indian steel sector.
Driven by rising infrastructure development and increasing capacity addition in the automotive industry, demand for steel is expected to be robust. The estimated steel consumption in airport building is also likely to grow more than 20 per cent over the next few years with more and more modern and private airports expected to be set up.