Learn about the factors contributing to the continuous growth of India’s steel sector and some significant challenges.
India’s steel industry is experiencing robust growth and development. With a prosperous history, this industry has been a cornerstone of the country’s economic progress. Steel has traditionally held a prominent position among metals, often seen as a means of fostering economic development. India’s steel capacity is on the rise, and it is expected that the industry is ready for further robust development.
In this article, we will delve into the factors driving the continuous development of India’s steel industry and discuss some challenges in detail.
What’s Happening?
Addressing the Steel Conclave program in Delhi, Secretary of Steel, Nagendra Nath Sinha, stated, ‘India’s steel capacity has exceeded 161 million tons. Along with this, the industry is poised for continued growth.’ According to Economic Times, he provided information that, as per the National Steel Policy, India aims to establish a steel capacity of 300 million tons by 2030.
Factors Driving Industry Growth
Key factors contributing to growth in the Indian steel sector include the availability of domestic raw materials like iron ore and cost-effective labour. As a result, the steel sector has made a significant contribution to India’s manufacturing output. Additionally, the Indian steel industry has modernised with state-of-the-art steel mills.
Speaking about the main reasons behind the continued development of the steel sector, Secretary Narengra Nath Sinha highlighted, ‘India is the world’s fourth-largest automobile market, and there is an expected 8-10% CAGR in the next 10 years. Furthermore, the manufacturing sector has witnessed a CAGR of 7-8%, leading to increased demand for steel in both sectors. Additionally, the steel sector’s production-related incentive scheme is making good progress.’
Challenges Ahead for the Sector
While the steel industry is rapidly developing, it also faces several challenges. Secretary Sinha mentioned that the sector must address challenges related to carbon emissions and global market demand. He emphasised the importance of adopting low-carbon technologies, collaborating with stakeholders, and embracing green practices for the long-term sustainability of the industry, aligning with national and international environmental goals.
Furthermore, Tata Steel’s CEO and MD, T.V. Narendran, expressed concerns about India being a net importer of steel. He stated, ‘I think it is a matter of some concern because, due to China, international steel prices are still somewhat soft.’
According to Steelmint India as stated in The Print, steel imports in India remained at 4.6 lakh tons in October, while exports were comparatively lower at 2.4 lakh tons.
Steel Production Figures in India
India has witnessed a significant surge in demand for steel, although the production capacity has also increased. According to the IBEF report, the production of crude steel and finished steel in FY23 was 125.32 metric tons and 121.29 metric tons, respectively.
What’s Next?
According to a Statista report, steel demand in India was approximately 120 million metric tons in the financial year 2023, with an expected increase of 7.5% in 2024.
India’s steel industry is on an important growth trajectory. With government initiatives, increasing domestic demand, export opportunities, technological advancements, and the availability of raw materials, the industry creates a favourable environment. Contributing to clean and green future industries, it holds crucial potential for advancing the country’s economy.
That’s all for today. We hope you found this information interesting. Don’t forget to share it with your friends.
*Note: This article is for informational purposes only. It is not investment advice.
*Disclaimer: https://tejimandi.com/disclaimer
