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.
India’s finished steel consumption grew at a CAGR of 5.2% 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.
From April 2020 to September 2020, India’s cumulative production of crude steel was 52.37 MT and finished steel was 47 MT.
Export and import of finished steel stood at 8.24 MT and 6.69 MT, respectively, in FY20P.
Export and import of finished steel stood at 7.10 MT and 2.35 MT, respectively, between April 2020 and October 2020.
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$ 14.22 billion in the period April 2000-June 2020.
Some of the major investments in the Indian steel industry are as follows:
Some of the other recent Government initiatives in this sector are as follows:
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. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31.
As per Indian Steel Association (ISA), steel demand will grow by 7.2% 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%)
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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