Effects of Globalization on Indian Steel Industry

Overall Rating: star ratingstar ratingstar ratingstar ratingstar rating[5/5]Total Votes [ 3 ]  
Rate this page:
The effects of Globalization on Indian steel industry have been felt more profoundly in the past few years. The India steel industry is one of the major industries in India.

The effects of Globalization on Indian steel industry are not same throughout the country. The effects depend on the different regions, the type of raw materials used, the condition of the markets, technological advancements, the policies of the governmental authorities pertaining to the trade and business activities of the Indian steel industry, etc. In this age of the globalization, as the other industries of the developing countries, the Indian steel manufacturing sector needs to restructure itself, in order to have a sustainable growth. This will be very helpful for providing the correct strategies for the steel industry in India. The restructuring should depend on the different requirements of the steel industry.

The government played a very important role in the development of the steel industry in India. The India steel industry is experiencing a slow but steady growth. The steel industry in India has huge scopes in the future with massive scale of infrastructural development happening all across the country. The steel industry in India caters to many other industrial sectors such as construction industry, mining industry, transportation industry, automobile industry, engineering industry, chemical industry, etc. The steel segment includes the manufacturing of three different kinds of steel such as carbon steel, ferro-chrome steel, and stainless steel.

The steel industry in India has further plans of development. Plans are being chalked out on setting up of three pig iron manufacturing units of the combined capacity of 6 lakh tons per year and a steel manufacturing unit of the capacity of producing 1 million tons yearly in West Bengal, with the technical and financial support of China. With all these developments steel industry in India is all set to become one of the most reputed industries not only in India but also in the international market as suggested by experts.

In order to survive the immense competition under the globalization, the Indian steel industry plans a reversal of the production of steel industry. The main objectives of the strategy is the derivation of the benefit from the optimum utilization of the plant capacity, the nullification of any form of drawbacks, to track the opportunities in order to get the maximum from it and to tackle the possible threats.

The strategy suggested for the reversal of the steel industry in India is double layered in nature, effecting the reversal and at the same time sustaining the reversal. The strategy has to be growth and survival oriented. The survival part would assure the survival of the industry in the fierce competitive atmosphere and the growth part would boost the sustainable growth of the industry. The two different parts of the strategy has to be integrated into one to have the expected results.

The reduction of the cost is another major factor in the survival of the Indian steel industry in the age of globalization. The cost reduction would be the main aspect of the improvement pertaining to the competitiveness of the industry. The manufacturers under the steel industry in India have to focus their attention in the areas such as:

  • The reduction in the cost of operations
  • The reduction in the costs pertaining to the working capital
  • The reduction in the costs pertaining to the production inventory or stock that is not sold
  • The improvement in the economics operating in the technological aspects of production
  • The transposition of basic materials of production
  • The sources of the procurement should be different

Last updated on 3/18/2011

BPO Services India | Essar Steel