India has solidified its position as the world’s second-largest producer of crude steel, trailing only behind China, according to the World Steel Association. The nation’s Ministry of Steel reported that crude steel production in India reached 109.3 million tonnes in 2018, marking a remarkable 7.7% increase from the previous year. This upward trend continued in 2019, with production climbing to 111.2 million tonnes. The growth in the Indian steel sector can be attributed to the abundant availability of raw materials, a skilled labor force, and a rapidly expanding construction and manufacturing market.
The steel industry in India operates within a deregulated framework, with individual companies determining steel production quantities based on commercial considerations and market demands. Consequently, the sector has emerged as a key driver of India’s economic progress.
To further bolster the domestic steel industry, the Government of India has introduced the National Steel Policy 2017 and the Policy for Providing Preference to Domestically Manufactured Iron and Steel (DMI & SP) in state procurement. These policies have created a conducive environment to enhance domestic steel production and consumption. Additionally, quality control orders have been issued to prohibit the manufacture and import of substandard and inexpensive steel.
In a significant move, India has opened up its coal mining sector, presenting substantial opportunities for the steel industry. The country has also been actively inviting foreign investments in the steel sector, anticipating a 7.2% growth in steel demand for 2019-20 and a consistent rate in 2020-21.
The Government of India has recently launched the Purvodaya program, aiming to accelerate the development of eastern India by establishing an integrated steel hub. States like Odisha, Jharkhand, Chhattisgarh, West Bengal, and the northern part of Andhra Pradesh collectively hold approximately 80% of the country’s iron ore reserves and almost 100% of coking coal reserves, along with substantial resources of chromite, bauxite, and dolomite. Moreover, this region boasts major ports, such as Paradip, Haldia, Vizag, and Kolkata, with around 30% of India’s major port capacity. The strategic utilization of these resources and infrastructure can transform the eastern belt into a prominent global exporting and industrial hub, making the Purvodaya program a crucial strategic initiative.
The Government envisions that the eastern region possesses the potential to contribute over 75% of the country’s incremental steel capacity, as per the National Steel Policy projections. This means out of the targeted 300 million tonnes capacity by 2030-31, more than 200 million tonnes can be achieved through Industry 4.0-led growth in the eastern states. The steel hub’s objective is to enable rapid capacity expansion, generate significant employment opportunities, and enhance the overall competitiveness of steel producers in terms of cost and quality.
In the journey towards becoming a US$5 trillion economy, the eastern belt’s transformation holds immense promise and can serve as a vital catalyst in India’s growth story. With strategic planning and investment, the region is well-positioned to become a major driver of the country’s steel industry and a significant player on the global industrial stage.
