Market Trends India: Performance of the Steel Sector in India
The global steel production recorded a marginal growth of 1% to reach 1,665 MT over the previous year. The sector contributes to nearly 2% of India’s GDP and is likely to grow by 6.2% in 2015 and 7.3% in 2016.
The ‘Make in India’ initiative by the Indian Government encourages multinational and domestic companies to manufacture their products in India. Investment proposals of over Rs 1, 10,000 crore (US$ 16.56 billion) being received in the last 12 months across industries is a clear indicator that the initiative is working.
India has become one of the most attractive destinations for investments in the manufacturing sector. With a hard focus on the manufacturing sector, the government is trying to upgrade the skills of its workforce. Taking a cue from countries such as Japan and Germany, known for their top-quality manufacturing, the government is starting an investor outreach program with several countries to bring global best practices into India so as to achieve world standards and be a part of the global supply chain.
Furthermore, the government recently launched ‘Make in India Mittelstand!’, a business support program for 30 ‘high-potential’ German companies to invest in India. Global manufacturing is in turmoil with the low cost model of last two decades coming under pressure. China’s competitiveness is eroding. Brazil seen as one of the most competitive destination ten years ago is becoming a high-cost country.
This turmoil provides a unique opportunity for India to become among the top three manufacturing players in the world. `Make in India` has changed the mind sets-both inside and outside the country. Various states were mobilized and the results are showing. The following is an overview of the Indian steel sector.
Indian steel sector
The global steel production recorded a marginal growth of 1% to reach 1,665 MT, over the previous year. The sector contributes to nearly 2% of the country's GDP. Indian Steel sector is likely to grow by 6.2% in 2015 and 7.3% in 2016. Construction, infrastructure, capital goods and automobiles are the major sectors responsible for steel consumption in the country. While traditional sectors have stronghold in steel consumption; special steel are increasingly being used in engineering industries like defense, aerospace, power generation and oil and gas.
Indian steel industry can be broadly classified based on type of producers operational in country.