India: the next steel powerhouse?

Global steel 2013

A new world, a new strategy

  • Share

According to the Planning Commission of India, the country’s steel production is expected to grow by around 60 million tonnes during the Twelfth Five Year Plan (2011–12 to 2016–17).

“India’s domestic steel consumption will continue to grow steadily for several years into future — driven by urbanization, favorable demography, GDP growth, refocus on industrialization and stepped-up investments in infrastructure.” - Anjani Agrawal, India Mining & Metals, Leader, EY

Although China is the dominant market in the steel sector, India is increasing its presence in the global steel market as a result of domestic steel consumption. The rising middle class population coupled with increased urbanization will grow steel intensity in the economy.

Projected infrastructure investment during the 12th FYP
Projected infrastructure investment during the 12th FYP
Source: Committee on Infrastructure/Planning Commission

India has seen a rapid rise in production over the past few years, which has resulted in India becoming the fourth-largest producer of crude steel and the largest producer of sponge iron in the world.

There are many opportunities that are helping the Indian steel market grow. These include:

  • Rural demand picking up
  • Investment planned in road sector
  • Indian railway expansion
  • Automobile and power sectors offer opportunity for specialized steel
  • Refocus on manufacturing

However, there are also some challenges that India must overcome in order to continue on the path of becoming the next steel powerhouse. These challenges include:

  • Land acquisition and environment regulations
  • Shortage of coking coal
  • Availability and pricing of domestic iron ore
  • Downstream value addition
  • Insufficient infrastructure and logistics
  • Overburdened port facilities
  • Adoption of modern technology

PreviousNext