Growth Potential of India’s Steel Industry

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India has traditionally been one of the major producers of steel in the world. Till the 1990s the steel industry of India was regulated and controlled by government policies.

[br]After the economic reforms of the early 1990s, the Indian steel industry has evolved significantly to conform to global standards.

India has set a vision to be an economically developed nation by 2020. The steel industry is expected to play a major role in India’s economic development in the coming years. The steel industry of India has a very high growth potential and is expected to register significant growth in the coming decades. India is expected to emerge as a strong force in the global steel market in coming years.

The two major aspects that are expected to play a significant role in the growth of the steel industry in India are –
  • Abundant availability of iron ore in the country
  • The country has well established facilities for steel production

    Steel production in India has grown from 17 MT in 1990 to 36 MT in 2003. It is expected that by 2011, the steel production in India will grow to 66 MT.

    The major sectors where consumption of steel is expected to grow in the coming years are –
  • Construction
  • Housing
  • Ground transportation
  • Hi-tech engineering industries such as power generation, petrochemicals, fertilizers [br]The current scenario of the Indian steel industry indicates that there is huge growth potential in this industry. The per capita-consumption of steel in India, according to latest available estimates, is only 29 kg. This is much less compared to the global average of 140kg. The per capita consumption level of developed nations like the United States of America is 400kg. In this respect, one of the major initiatives that need to be taken is to focus on increasing the consumption of steel in the rural areas of India. The potential for the growth of consumption of steel in the rural areas of India for purposes like rural housing, rural infrastructure, etc is high which needs to be tapped efficiently.

    In order to realize the growth potential in the steel industry of India, it is essential to ensure that the industry can remain competitive. One of the major aspects in this regard is the availability of inputs. Shortage of inputs like coke has led to increase in costs earlier. Moreover proper infrastructure facilities like transport infrastructure, power etc are of prime importance in maintaining the competitiveness of the industry.

    Most developed countries have regulations that are aimed to protect the domestic steel industry. The Indian steel industry has comparatively much lesser protection through regulations. Proper regulatory measures should be adopted by the government to protect the domestic steel industry.

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