Steel Industry in India
Source: PIB
GS III: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth
Overview
- News in Brief
- Historical Evolution of Steel Industry in India
- Current Status of the Indian Steel Industry
- Geographical Distribution of Steel Industry in India
- Challenges Facing the Indian Steel Industry
- Government Initiatives for the Steel Sector
Why in the News?
Steel is the Backbone of India’s Economy, Coal and Mines Sector is the Strong Foundation on Which it Stands.
News in Brief
- The steel industry forms the backbone of a nation’s infrastructure and economy.
Photo by Peter Herrmann on Unsplash - It is a vital sector contributing significantly to manufacturing, construction, transport, defense, and various strategic sectors.
- For India, steel is not just an industrial product but a symbol of economic resilience and technological advancement.
- Post-Independence, India’s leadership recognized steel production as a driver of modern industrialization.
- India stands among the largest producers and consumers of steel in the world, aiming for even greater heights with ambitious government initiatives like “Make in India” and “Atmanirbhar Bharat”.
Historical Evolution of Steel Industry in India
-
Ancient Period:
India has a rich history of iron and steel-making. As early as 300 BCE, Indian metallurgists were producing high-quality steel known as Wootz Steel, which was exported to various parts of the world. -
Colonial Era:
The British discouraged heavy industry, including steel, in India. However, a major milestone was achieved with the establishment of Tata Iron and Steel Company (TISCO) in Jamshedpur in 1907 by Jamshedji Tata. -
Post-Independence Period:
Recognizing steel as the “cornerstone of economic development,” the government set up three major public sector integrated steel plants at Bhilai, Rourkela, and Durgapur during the Second Five-Year Plan (1956-61), with Soviet, German, and British collaboration. -
Liberalization and Beyond (1991 onwards):
With economic liberalization, private players like JSW Steel, Essar Steel, and Jindal Steel and Power Ltd. (JSPL) emerged as significant contributors to India’s steel production.
Current Status of the Indian Steel Industry
- Production:
- India is the 2nd largest crude steel producer in the world, surpassing Japan in 2018.
- Crude steel production (2023-24): ~128.28 million tonnes (provisional) Finished steel consumption (2023-24): ~119.24 million tonnes
- Major Producers:
- Public Sector: Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL)
- Private Sector: Tata Steel, JSW Steel, Jindal Steel and Power, ArcelorMittal Nippon Steel India
- Exports and Imports:
- Exports (2023-24): ~9.3 million tonnes
- Imports (2023-24): ~6.5 million tonnes
- Employment:
- The sector employs around 25 lakh people directly and indirectly.
Geographical Distribution of Steel Industry in India
The steel industry in India has developed primarily around the Chota Nagpur Plateau due to the availability of:
- Rich iron ore deposits (Jharkhand, Odisha)
- Coal (particularly coking coal from Jharia and Bokaro)
- Manganese, limestone, and dolomite
- Water from rivers like Subarnarekha, Damodar
- Good transportation links
Major Steel Plants
| Plant | Location | Collaboration |
|---|---|---|
| Tata Steel | Jamshedpur, Jharkhand | Indigenous |
| SAIL – Bhilai Steel Plant | Chhattisgarh | USSR |
| SAIL – Rourkela Steel Plant | Odisha | Germany |
| SAIL – Durgapur Steel Plant | West Bengal | UK |
| Vizag Steel Plant | Andhra Pradesh | Indigenous |
| JSW Steel | Bellary, Karnataka | Indigenous |
Challenges Facing the Indian Steel Industry
- Raw Material Constraints Shortage of high-grade coking coal (India imports ~85% of its coking coal needs, mainly from Australia)
- High Production Costs High logistics, energy, and labor costs increase the cost of Indian steel vis-à-vis global players.
- Technological Obsolescence Many older plants still operate with outdated technologies leading to lower efficiency and higher emissions.
- Environmental Concerns Steel production is energy-intensive and emits large quantities of CO₂. India’s steel sector contributes about 12% of the country’s total industrial emissions.
- Global Competition Influx of cheap steel from countries like China creates pressure on Indian steel prices and profitability.
- Demand Fluctuations Steel demand is cyclical, depending on the health of sectors like construction, automobile, and infrastructure.
Government Initiatives for the Steel Sector
National Steel Policy, 2017
- Objective: To make India a globally competitive steel producer.
- Targets:
- Crude steel capacity of 300 million tonnes by 2030-31 Per capita steel consumption to rise from ~77 kg to 160 kg Make India self-sufficient in steel production and promote R&D
Production Linked Incentive (PLI) Scheme
- An outlay of ₹6,322 crore for the specialty steel sector.
- Target: Boost specialty steel production and reduce imports.
Scrappage Policy
- Promote recycling of steel, improve availability of scrap, and reduce dependency on imports of coking coal.
Green Steel Initiatives
- Encouraging hydrogen-based steelmaking to decarbonize the sector.
- Companies like Tata Steel and JSW are experimenting with green steel technologies.
Conclusion
- The steel industry has been instrumental in transforming India’s industrial landscape, contributing significantly to GDP, employment, and strategic sectors.
- From ancient Wootz steel to modern hydrogen-based steel production, India’s journey has been one of resilience and innovation.
- However, challenges like raw material dependency, high costs, and environmental sustainability need concerted efforts from both government and private players.
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