Textile Industry in India

India is the second-largest producer of crude steel in the world. India Steel Industry has grown by leaps and bounds, especially in recent times with Indian firms buying steel companies overseas. The scope for the steel industry is huge and industry estimates indicate that the industry will continue to grow reasonably in the coming years with huge demands for stainless steel in the construction of new airports and metro rail projects. The government is planning a massive enhancement of the steel production capacity of India with the modernization of the existing steel plants. India has rich mineral resources. It has an abundance of iron ore, coal and many other raw materials required for iron and steel making. It has the fourth-largest iron ore reserves.

Industry Statistics

India's steel industry produced 100.78 MT in FY 2020. India ranked 2nd in 2018 with 106.5 MT of crude steel produced. In India, as per Indian Steel Association (ISA), steel demand is estimated to grow 7% in FY20 and FY21. The current steel-producing capability of India is 140 MT and is estimated to grow to 300 MT by 2030-2031.

Export

India’s steel consumption stands at 6.78 MT as of April 2021. India exported 9.49 MT of steel in FEB 2020 – APR 2021. India’s exports rose by 196% over that of 2019. About 50% of the steel produced in India is exported. India’s steel export saw an increase of over 100% in June 2020. The pandemic had shut down all businesses for two months which were then restarted in June 2020.

Hurdles

• High cost of energy
• Higher duties and taxes
• Power shortage hampers the production of steel
• Use of outdated processes for the production
• Lags behind in the production of stainless steel
• Deficiency of raw materials required by the industry
• Labour productivity is low. It is 144 tons per worker per year against 600 tons in Western Europe as per estimates.
• Dependence on imports for steel manufacturing equipment & technology
• Inadequate shipment capacity and transport structure

Strengths

There are many strong points of the industry that makes it one of the leading names in the global steel industry. The rate of labour wage in India is among one of the lowest in the world thereby making large scale production feasible. The boom witnessed in the automobile industry has ensured that the steel demand is increasing gradually and will continue to do so shortly. There is huge manpower in India which is another reason why steel production in India is high and the industry is doing pretty well both nationally and internationally.

Investments

Numerous steel companies have major projects in the pipeline to invest in the India Steel industry. Steel companies have earmarked more than 100 million USD for the setting up of sponge iron units in Koppal and Bellary in Karnataka. As of July 2021, the Odisha state government has approved 5 steel projects worth 1.46 lakh crore investment. Major steel firms plan to invest over 60,000 Crore over the next three years.