The outlook of the Iron Industry role in India GDP
Due to increasing global steel and iron demand, the Indian steel and iron industry is having an excellent time currently. If you look closely, you will find that iron rates in India are steadily growing and the same applies to the steel rates too. Indian GDP (Gross Domestic Product) is a standard parameter to look for when it comes to any industry. The contribution of the Indian iron industry is high compared to other industries.
Furthermore, in the upcoming future, the total production and consumption of Iron and steel will increase as per the industry trade analysts. The Indian government has determined to take all possible steps to strengthen the industry by emphasizing on infrastructure, raw material availability and other concrete steps required to encourage the industry to reach global benchmarks.
Indian Iron and Steel Industry
One of the main reasons for India being the third largest steel producer and third largest steel consumer is the availability of raw materials such as iron ore. Furthermore, labour is cheap in India.
The steel mills in India are upgraded ones and technology-driven. They have state-of-the-art technology and tools available to meet any demands. The energy efficiency levels are high and older plants are replaced with new ones to meet global demand.
The Indian government launched the National Steel Policy in 2017 to make the Indian steel and Iron industry more productive and strengthening.
There is a total of three types of steel producers in India- Major Producers, main producers and secondary producers.
The finished steel consumption has reached to giant 90.68 MT at the growth rate of 5.69% during 2008-18.
In addition to that, the crude steel production has reached to 102.34 MT and the finished steel production has reached to 104.98 MT in 2017-18.
In steel exports too, India has made a giant leap. Its finished steel exports reached to 9.62 MT compared to 8.24 MT in 2016-17. The growth percentage is almost 17% which is a good sign. The total imports and exports of finished steel have reached to 5.41 MT and 4.33 MT during Apr-Nov. 2018.
Investments in the Steel Industry:
Everybody bat on a winning horse, it is true. The Indian steel and iron industry, along with other mining and metallurgy sectors have become the most lucrative sectors from the investment point of view.
In the duration of April 2000–June 2018, Indian metallurgical industries have got US$10.84 billion Foreign Direct Investments, as per the data by the Department of Industrial Policy and Promotion (DIPP).
Furthermore, the Vedanta Group is all set to start a steel plant in Jharkhand that can produce 1 million tonne steel. The total investment value is 22,000 crore (US$3.13 billion).
JSW Steel will enhance the capacity of its Vijaynagar plant to produce 18 million tonnes per annum. The current capacity is of 13 MTPA. The total investment value is Rs. 7,500 crores (US$1.12 billion).
Tata Steel has acquired Bhushan Steel by bidding of US$ 5,461.60 million. Moreover, Tata Steel also plans to expand the manufacturing capacity of its Kalinganagar integrated steel plant from 2 MT to 8 MT. The total investment value is US$ 3.64 billion.
Overall, the prospects are far more superior as the Indian government is keen to bring more industry-friendly policies and processes to strengthen the sector.
The contribution of the Indian steel and iron industry to the Indian total GDP will gradually rise and steel prices in India will too increase in recent times.