India has firmly established itself as a global leader in the steel industry, ranking as the world’s second-largest producer of crude steel and the largest producer of sponge iron. With a crude steel production capacity of 179.5 million tonnes (MT) and sponge iron production at 60.5 MT during FY 2023-24, the sector serves as a critical pillar of the country’s economic framework.
Steel: A Vital Economic Contributor
The steel industry contributes approximately 2% to India’s GDP, supporting nearly 2.8 million jobs, both directly and indirectly. India is also the 2nd-largest consumer of steel in the world. Beyond its direct impact, the sector’s output multiplier of 1.4 and employment multiplier of 6.8 underline its broader economic significance. As the backbone of India’s infrastructural ambitions, the steel industry drives growth in construction, infrastructure, and manufacturing.
Impressive Growth Metrics
The Indian steel industry has maintained robust growth over the years, with a compound annual growth rate (CAGR) of 7% since 2004. In FY 2023-24 alone:
- Steel production capacity surged by 11.3%, reaching 179.5 MT.
- Crude steel production increased by 13.4%, totaling 144.3 MT.
- Finished steel consumption grew by 13.7%, amounting to 136.29 MT.
Additionally, India’s sponge iron production stood at 51.56 MT, reaffirming its global leadership in this category.
Trade Statistics (FY 2023-24):
- Exports: 7.49 MT of finished steel.
- Imports: 8.32 MT of finished steel (net importer).
The Steel Industry: A Comprehensive Overview🇮🇳
— Insights | Integration🖊️ (@con_nectinder) December 25, 2024
Contributes 2% to GDP
India is also the 2nd-largest consumer of steel in the world🌎
India is a 𝑁𝑒𝑡 𝐼𝑚𝑝𝑜𝑟𝑡𝑒𝑟 of steel📊
Per Capita Steel Consumption:
• India: 97.7 kg (FY 2023-24)
• Global Avg: 219.3 kg (2023)
– GSI pic.twitter.com/bUTrMNFSdx
Balancing Production and Consumption
Despite its production might, India remains a net importer of steel. During FY 2023-24, the country exported 7.49 MT of finished steel while importing 8.32 MT. Moreover, per capita steel consumption, although increasing, lags significantly behind the global average. India’s per capita consumption rose to 97.7 kg in FY 2023-24, compared to the global average of 219.3 kg in 2023.
To bridge this gap, the National Steel Policy 2017 has set ambitious targets:
- Expand production capacity to 300 MT by 2030-31.
- Increase per capita consumption to 160 kg by 2030-31.
Steel’s Role in Driving Key Sectors
The demand for steel in India is heavily influenced by growth-driving sectors:
- Construction: 43%
- Infrastructure: 25%
- Automobiles: 9%
- White goods and packaging: 22%
- Defense: 1%
With ongoing urbanization, infrastructure projects like smart cities, and the rise of the automobile and defense sectors, the demand for steel is expected to remain robust.
Timeline of major government initiatives aiding decarbonisation of the Indian iron and steel industry
- Perform Achieve and Trade (PAT), 2012
- Upscaling Energy-efficient Production in the Secondary Steel Sector in India, 2016
- Development of Environmental Technology for Steelmaking Process, 2017
- National Steel Policy (NSP), 2017
- Domestically Manufactured Iron & Steel Products (DMI&SP) Policy, 2017
- Steel Scrap Recycling Policy, 2019
- National Mission on Use of Biomass in Thermal Power Plants, 2021
- Vehicle Scrapping Policy, 2021
- Life Mission, 2022
- Carbon Credit Trading Scheme (CCTS), 2023
- National Green Hydrogen Mission, 2023
- Constitution of 14 Task Forces, 2023
Challenges and Opportunities
While the Indian steel industry is a global force, challenges such as low per capita consumption, import dependency, and the need for sustainable practices persist. However, these challenges also present opportunities for innovation, investment, and policy support.India is also the 2nd-largest consumer of steel in the world🌎
India’s steel industry stands as a testament to the country’s industrial prowess and economic potential. With focused policies, strategic investments, and an unwavering commitment to innovation, India is poised to not only meet its ambitious targets but also redefine global benchmarks in the steel sector. As the country strives for self-reliance and sustainable growth, steel will undoubtedly remain at the forefront of its economic journey.
Reference: GSI Report
