Role of Iron and Steel Industry in Indian Economy

The Role of Iron and Steel Industry in India GDP is very important for the development of the country. In India the visionary Shri Jamshedji Tata set up the first Iron and Steel manufacturing unit called Tata Iron and Steel Company, at Jamshedpur in Jharkhand. Iron and steel are among the most important components required for the infrastructure development in the country.

Iron ore and steel industry is one of the basic industries of the country and plays an important role in strengthening the economy.
Delivering a talk on the ‘Indian iron ore industry-an overview’, CS Gundewar, controller general, Indian Bureau of Mines said that India was the fourth largest producer of steel in the world. Iron and steel was one of the largest industries supporting the country’s economy.
Gundewar was speaking at the National technology Day programme organsied by the National Environmental Engineering Research Institute (Neeri).

At present India produces 65 million tonnes steel, but as per the ‘National Steel Policy’ country is expected to raise this production to 180 million tonnes by the year 2020. But this, he said, would be possible only by exploring new mines. Though India has large resources of iron ores with estimated capacity of 28.52 billion tonnes, magnetite reserves could not be exploited due to the presence of these ores in the ‘eco-fragile’ zones mainly in Western Ghats. Iron ore is found as hematite and magnate in India in the ratio of 63:37.

Role of Iron and Steel Industry in Indian Economy

Gundewar also stressed on the need for more scientific and environment conscious mining by using eco-friendly technologies. He pointed out that consumption of iron ore (hematite) in iron and steel manufacture in the country is only around 45-50% of the domestic production, whereas remaining iron ore is exported at present due to inadequacy of suitable agglomeration facilities (pelletisation in particular) in the country.

The following are the premier steel plants operating in India:

1.Salem Steel Plant at Tamil Nadu
2.Bhilai Steel Plant at Chattisgarh
3.Durgapur Steel Plant at West Bengal
4.Alloy Steel Plants at West Bengal
5.Visvesvaraya Iron and Steel Plant in Karnataka
6.Rourkela Steel Plant at Orissa
7.Bokaro Steel Plant at Jharkhand

Role of Iron and Steel Industry in India GDP-Facts

  • The Iron and Steel Industry in India is one of the fastest growing sectors
  • The demand drivers for the Indian Iron and Steel industry are increase in the activities of the automobiles industry, real estates industry, transportation system, aircraft industry, ship building industry, etc.
  • India ranks 5th in the world in terms of production of steel
  • The amount of crude steel produced in 2006-07 was 50.71 million tonnes
  • The amount of finished steel produced in 2006-07 was 51.9 million tonnes
  • The production of finished steel was increased by 16.52%
  • The production of finished carbon steel was 24.8 million tonnes in the year 2006-07
  • It is expected that India would become the second biggest producer of steel within the year 2016 and the production per year would be 137 million tonnes
  • The exports pertaining to the steel industry was 6.26 % during the period 2006-07

Role of Iron and Steel Industry in India GDP-Consumption

  • The domestic consumption of steel has grown by12.5% in the past three years
  • The domestic steel consumption in the year 2006-07 was 41.14 million tonnes
  • The average growth rate of the Indian Iron and Steel Industry is 11.36%
  • The construction projects all over India are major consumer of steel
  • The per capita consumption of steel in India is 35kgs
  • As the per capita consumption of steel is lower than other countries, so the steel industry has huge opportunities in the future

Role of Iron and Steel Industry in India GDP-Growth in Future

  • The Arcelor Mittal, which is the largest steelmaker in the world, has plans of establishing two Greenfield steel projects with capacity of 12 million tonnes annually, in India
  • Acerinox SA, one of the important stainless steel manufacturers in collaboration with Nisshin Steel, Japan is setting up a steel plant in India
  • The Tata Steel ranks 5th in the world steel production and the company have plans of expanding its capacity by the year 2015
  • SAIL, India’s biggest producer of steel has plans of increasing the production to 24.98 million tonnes annually
  • Sinosteel Corp, China are planning to invest US$ 4 billion to set up a 5 million tonnes capacity Greenfield steel plant
  • The acquisition of the Corus, the Anglo-Dutch steel manufacturer by the Tata Steel
  • The Algoma Steel, Canada was acquired by Essar Global for US$ 1.63 billion

India’s present per capita consumption of crude steel is only 24 kg. which is very low compared to the developed and developing countries- 422 kg. in USA, 417 kg. in Germany 109 kg. in Russia and 87 kg. in China. Our consumption is less than one fifth of the world average (121 kg.).

In 1992, the total consumption of finished steel was 14.84 million tones. In 2008, the total amount of domestic steel consumption was 43.925 million tones. With the increased demand in the national market, a huge part of the international market is also served by this industry. Today, India is in seventh position among all the crude steel producing countries.