While the global steel industry faces a challenging downturn, India’s steel sector has outperformed. What’s next?
India’s steel sector is a vital player globally, driving economic growth. Its widespread use in construction, railways, vehicles, machinery, energy, and electronics highlights its significance. With a strong emphasis on development, India implemented pivotal policies, encouraging advanced technology and establishing new steel plants.
Over the past decade, the Indian steel industry has witnessed remarkable expansion. Production has surged by an impressive 75% since 2008, accompanied by an approximate 80% rise in domestic steel demand. Simultaneously, the capacity for steel production has experienced substantial growth, solidifying India’s position as a steel-producing powerhouse.
What’s Happening?
While global steel production experienced a 5.1% decline to 161.6 million tonnes in May 2023. India’s steel industry showcased remarkable resilience with a 4.1% increase, reaching 11.2 million tonnes during the same period, according to the latest data from the World Steel Association.
Despite a 7.3% year-on-year decline, China maintained its leading position by producing 90.1 million tonnes of crude steel. Worldsteel’s recent report also highlighted Japan’s 5.2% decrease in production to 7.6 million tonnes and the US’ 2.3% decline, producing 6.9 million tonnes of steel. India’s positive growth amidst these global challenges signals its strength and potential in the steel industry.
Significant Investment in the Steel Sector
According to government data, till December 2022, India was the world’s second-largest producer of crude steel. The availability of raw materials such as iron ore and cost-effective labour have been key factors in the growth of the Indian steel sector. Moreover, with state-of-the-art steel mills, the Indian steel sector is marching ahead with modernity.
Steel Minister Jyotiraditya Scindia declared a robust vision to boost steel production from 150 million tonnes to 300 million tonnes by 2030, aligning with numerous infrastructure projects underway. The sector has witnessed substantial investments and advancements, reflected in the government’s allocation of Rs 70.15 crore (US$ 8.6 million) to the steel ministry in the Union Budget 2023-24.
What’s Next?
With the implementation of schemes like Production-Linked Incentives (PLI), the steel industry anticipates a significant surge in demand. The IBEF report highlights the projected annual steel production to exceed 300 million tonnes by 2030-2031. Additionally, crude steel production is estimated to reach 255 million tonnes, operating at an impressive 85% capacity utilisation, reflecting the sector’s growth potential and capacity expansion plans.
*The article is for information purposes only. This is not an investment advice.
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