Indian steel industry faced a rapid development over the last decade and has a high potential to grow even faster in future. Currently, the industry has a production capacity of 90.5 Million Tonnes Per Annum (MTPA), originating from 75 MTPA for the period of 2009-2010. It is going to rise from the 3rd largest producer of crude steel in 2015 to the 2nd largest in 2016, providing 600,000 jobs currently. Foreign Direct Investment (FDI) hit US $ 8.7 billion for the period from April 2000 to May 2015.
Major investors are for example the Korean Steel company “Posco Korea”, which is about to set up a steel plant at Satarda in Maharashtra taking Shree Uttam Steel and Power (part of Uttam Galva Group) into account. Moreover, SAIL (Steel Authority India Ltd.) projects investments in the amount of US $23.8 billion in order to drive production capacity and entered a joint venture with the world’s leading steel maker Arcelor Mittal to set up an automotive steel manufacturing facility in India. But what drives this rapid development in India’s steel industry and creates this favorable framework to attract investors?
According to Anil Agarwal, the founder and chairman of Vedanta Resources, the reasons are to be found in the ideal conditions for investors due to a confidential business environment. The government realised that easing business is the most important thing and under the program „Make in India“, which allows 100 % Foreign Direct Investment (FDI), world class companies were attracted. India is thereby on its way to become global manufacturing and supply-chain hub. Besides attracting investors, the Indian Government is proactive in protecting the domestic market as well. While national steel industries like the one in United Kingdom struggle because of cheap Chinese products flooding the global market, India’s government set higher import duties on Chinese steel to protect from dumping prices.
But also the Indian steel market itself provides ideal conditions as India undergoes an industrial revolution and infrastructure is needed to drive the growth. Thereby related sectors, such as construction and steel market are growing as well. Exports of steel exceeded imports in the period of 2014-2015, 9.5 Million tonnes against 5.5 Million tonnes. So the efforts of Indian Government in order to provide ideal conditions for investments have already make an impact and the growth of Indian steel industry is likely to continue.
To read the latest news on the Metallurgy Industry in India click Metallurgy Newsletter