Rise in infrastructure development and automotive production are driving growth in the metals and mining sector in India. India has a vast mineral potential with mining lease granted for longer durations of 20 to 30 years. India produces 95 minerals – 4 fuel-related minerals, 10 metallic minerals, 23 non-metallic minerals, 3 atomic minerals and 55 minor minerals (including building and other minerals). India is expected to overtake Australia and the US in early 2020 to be the world’s second-largest coal producer.
India holds a fair advantage in cost of production and conversion cost of steel and alumina. The country is the second largest crude steel producer with production of 111.2 million tonnes (MT) of crude steel in 2019. Crude steel production and finished steel production stood at 108.5 MT and 101.03 MT, respectively, in FY20. India is the largest producer of sheet mica in the world and has the seventh largest bauxite reserves at around 2,908.85 MT in FY19. Iron ore production in the country increased to 205.70 MT in FY20. India’s iron and steel export in FY20 (till February 2020) stood at US$ 8.65 billion. Production of aluminium stood at 3.65 MT in FY20. Aluminium export from the country reached US$ 18.24 million in FY20 (till January 2020).
Coal production in the country stood at 729.10 MT in FY20 and reached 55.42 MT in FY21 (till April 2020).
The index of mineral production was 132.7 in March 2020. Mining group under Index of Industrial Production (IIP) stood at 109.7 for FY20, witnessing a growth of 1.7 per cent y-o-y.
National Mineral Policy 2019 was launched for transparency, better regulation and enforcement, and balanced social and economic growth into the sector.
Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in the mining sector and exploration of metal and non-metal ores under the automatic route, which will propel growth in the sector. Power and cement industries also aiding growth in the metals and mining sector. Given the strong growth expectations from residential and commercial building industry, demand for iron and steel is set to grow.
During April 2000–March 2020, FDI inflow into metallurgical industries stood at US$ 13,401.78 million. During the same period, FDI inflow in mining, diamond and gold ornaments and coal production sectors stood at US$ 2,731.07 million, US$ 1,177.01 million, and US$ 27.73 million, respectively.