Commerce Dashboard
Browse
Steel
India became the second largest steel producer of crude steel in 2019 with steel production at 111.2 MT.

Iron & Steel Industry in India

Latest update: June, 2020

Last Updated: June, 2020

Indian Steel Industry Report  (Size: 882.6 KB ) (June, 2020)

Introduction

India was the world’s second-largest steel producer with production standing at 111.2 million tonnes (MT) in 2019. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output.

The Indian steel industry is modern with state-of-the-art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels.

Indian steel industry is classified into three categories - major producers, main producers and secondary producers.

Market Size

India’s finished steel consumption grew at a CAGR of 5.2 per cent during FY16-FY20 to reach 100 MT. India’s crude steel and finished steel production increased to 108.5 MT and 101.03 MT in FY20P, respectively.

Export and import of finished steel stood at 8.24 MT and 6.69 MT, respectively, in FY20P.

 

Investments

Steel industry and its associated mining and metallurgy sectors have seen major investments and developments in the recent past.

According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), the Indian metallurgical industries attracted Foreign Direct Investment (FDI) to the tune of US$ 13.40 billion in the period April 2000–March 2020.

Some of the major investments in the Indian steel industry are as follows:

  • In March 2020, Arcelor Mittal Nippon Steel India (AM/NS) acquired Bhander Power plant in Hazira, Gujarat from Edelweiss Asset Reconstruction Company.
  • In February 2020, GFG Alliance acquired Adhunik Metaliks and its arm Zion Steel for Rs 425 crore (US$ 60.81 million), marking its entry into the Indian steel market.
  • For FY20, JSW Steel set a target of supplying around 1.5 lakh tonnes of TMT Rebars to metro rail projects across the country.
  • In December 2019, Arcelor Mittal completed the acquisition of Essar Steel at Rs 42,000 crore (US$ 6.01 billion) and formed a joint venture with Nippon Steel Corporation.
  • JSW Steel has planned a US$ 4.14 billion capital expenditure programme to increase its overall steel output capacity from 18 million tonnes to 23 million tonnes by 2020.
  • Ministry of Steel plans to invest US$ 70 million in the eastern region of the country through accelerated development of the sector.
  • The production capacity of SAIL is expected to increase from 13 MTPA to 50 MTPA in 2025 with total investment of US$ 24.88 billion.
  • Tata Steel has decided to increase the capacity of its Kalinganagar integrated steel plant from 3 million tonnes to 8 million tonnes at an investment of US$ 3.64 billion.

Government Initiatives

Some of the other recent Government initiatives in this sector are as follows:

  • Government introduced Steel Scrap Recycling Policy to reduce import.
  • An export duty of 30 per cent has been levied on iron ore^ (lumps and fines) to ensure supply to domestic steel industry.
  • Government of India’s focus on infrastructure and restarting road projects is aiding the demand for steel. Also, further likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel.
  • The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intend to create a globally competitive steel industry in India. NSP 2017 envisage 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030-31.
  • The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs 200 crore (US$ 30 million).
  • The Government of India raised import duty on most steel items twice, each time by 2.5 per cent and imposed measures including anti-dumping and safeguard duties on iron and steel items.

Road ahead

The National Steel Policy, 2017 envisage 300 million tonnes of production capacity by 2030-31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years. 

As per Indian Steel Association (ISA), steel demand will grow by 7.2 per cent in 2019-20 and 2020-21.

Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

Note: Conversion rate used in April 2020, Rs 1 = US$ 0.013123

References: Media reports, Press releases, Press Information Bureau (PIB), Joint Plant Committee (JPC)

Note: P- Provisional, Except low grade (below 58 per cent)

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

Agri Export Policy - Towards smoother trade, wider global presence

English

+ More Publications >

IBEF Publication

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

author_logo-ibef1.jpg Major changes announced in the National Education Policy 2020
IBEF, Knowledge Centre

On July 29, 2020, Union Cabinet approved the National Education Policy (NEP) 2020, which is the first education policy of the 21st century and has replaced the...

author_logo-ibef1.jpg Immunity Boosting Products – Renewed focus during COVID-19 crisis
IBEF, Knowledge Centre

The world is going through an unprecedented crisis with COVID-19. Scientists are working aggressively to find vaccine for the disease. In the meantime, the solution is to...

author_logo-ibef1.jpg India’s journey from manufacturing zero PPE kits to two lakh PPE kits per day
IBEF, Knowledge Centre

India was manufacturing nearly zero PPE kits until January 2020. It was manufacturing only medical gowns, which was just one of the components of the kit, whereas, no PPE...

author_logo-ibef1.jpg Self-Reliant India Movement: An opportunity
IBEF, Knowledge Centre

At a time when the world is suffering from a deadly pandemic, India plans to convert this crisis into an opportunity and strengthen its fight by becoming Aatmanirbhar or ...

author_logo-ibef1.jpg EXPORT OF MOBILE PHONES FROM INDIA: OVER 100% GROWTH IN FY20
IBEF, Knowledge Centre

Smartphones market in India have witnessed a phenomenal growth in the past few years. India overtook the United States (US) to become the second-largest smartphone market...

author_logo-ibef1.jpg India's largest tech FDI: Decoding the Facebook-Reliance Jio deal
IBEF, Knowledge Centre

The technology sector in India has witnessed its largest foreign direct investment (FDI) as Facebook announced its investment in Jio Platforms, a unit of Reliance Industr...

ideas More

Ideas

Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched Foodiebay.com in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on....

JOIN IBEF.org

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

Error

Already a member?
Login / Retrieve Password