India steel industry

India is the fifth largest producer of 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 steel industry is huge and industry estimates indicate that the industry will continue will 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.

Industry Statistics Government targets to increase the production capacity from 56 million tones annually to 124 MT in the first phase which will come to an end by 2011 - 12. Currently with a production of 56 million tones India accounts for over 7% of the total steel produced globally, while it accounts to about 5% of global steel consumption. The steel sector in India grew by 5.3% in May 2009. Globally India is the only country to post a positive overall growth in the production of crude steel at 1.01% for the period of January - March in 2009. Export About 50% of the steel produced in India is exported. India's export of steel during April - December 2008 was 64.4 MT as against 9.7 MT in December 2007. In February 2009, steel export increased by 17% to 12.6 MT from 10.8 MT in the same month last year. More than 50% of steel from India is exported to China. The Government's decision to reduce export duty on iron ore lumps from 15% to 5% has given a major boost to the export of steel. Hurdles Power shortage hampers the production of steel

Use of outdated process for production Lags behind in the production of stainless steel Deficiency of raw materials required by the industry Labor productivity is low. It is 144 tons per worker per year against 600 tons in Western Europe as per estimates. 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 labor 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 demand for steel is increasing gradually and will continue to do so in the near future. 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 some major projects in the pipeline to invest in 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 per Investment Commission of India more than 30 billion USD are in the pipeline for investment over the next five years.