Under the PLI scheme, the Government has approved INR 6322 crores to give a new impetus to the steel sector, generating an investment of about INR 30,000 crores, additional capacity creation of about 25 million tonnes of specialty steel in the next 5 years, and double the steel production from the present capacity of 150 million tonnes per annum to 300 million tonnes per annum by 2030. India is set to become a power house of manufacturing which will increase the share of steel in GDP from 2 to 5%, contributing towards achieving the status of 3rd largest economy by the year 2030-31.
The Indian steel industry looks forward to a promising future, backed by a plethora of schemes and incentives announced by the Central government. One of the most important, multifunctional and most adaptable materials, steel plays a key role in making the lives of people convenient. Being the basic raw material for a host of manufacturing activities, steel forms the backbone for the national economic development. The Indian steel industry is often considered an indicator of economic progress because of the critical role played by it in infrastructural and overall industrial development of a country.
Government’s vision of Viksit Bharat by 2047, schemes such as the implementation of three railway corridor programmes under the PM Gati Shakti scheme and comprehensive development of new airports under the UDAN scheme, announcements such as increase of 11 percent in the capital expenditure to INR 11.11 lakh crore, a new affordable housing scheme for the middle-class, building of two crore more houses under the Pradhan Mantri Gramin Awas Yojna, have attracted positive reviews from the stalwarts and experts, who predict a plethora of opportunities for the steel industry.
The Ministry of Steel has signed 57 MoUs with 27 companies for specialty steel under the Production Linked Incentive (PLI) Scheme. Under the PLI scheme, the Government has approved INR 6322 crores to give a new impetus to the steel sector. Shri Jyotiraditya Scindia, Union Minister of Steel and Civil Aviation, said that the PLI scheme is expected to generate an investment of about INR 30,000 crores and additional capacity creation of about 25 million tonnes of specialty steel in the next 5 years. This will also create great opportunities for direct and indirect job creation, besides contributing towards achieving the status of 3rd largest economy by the year 2030-31 as per the resolve and determination of the Prime Minister Shri Narendra Modi. The Minister said that there is a structural shift at international level from West to East has enabled India to emerge as an epicentre of evolution and growth of the steel sector. He said that India is set to become a power house of manufacturing which will increase the share of steel in GDP from 2 to 5%.
The Central government’s proposed hike in budgetary allocation for the Production Linked Incentive scheme coupled with large-scale augmentation in steel sector to double the production from the present capacity of 150 million tonnes per annum to 300 million tonnes per annum by 2030, are some of the promises by the government, which are a big thumbs up from the industry.
As per Mr. Sidharth Agrawal, Managing Director of Systematic Group, “The Indian steel wire industry has come a long way since its establishment in the 1920s. India’s steel wire market is expected to grow faster at a CAGR of 6-7 percent per annum than global average of 2 percent per annum by 2030, driven by strong growth in sectors like infrastructure, automotive and agriculture. The energy sector has also become one of the thriving sectors in the last few decades, with steel wires being predominantly used in manufacturing transmission lines, steel core wires, overhead power lines, and ground wires for wind power. Growing demand from the energy sector is one of the factors driving the steel wire segment’s market growth.”
Mr. Hanuman Prasad Agarwal, Managing Director, Kritika Wires Limited, said “The steel wire sector in India benefits from the stability of strong domestic demand. The country’s large population and ambitious infrastructure projects generate consistent requirements across diverse sectors, ranging from construction and automotive to agriculture and energy. This inherent stability shields us from global market fluctuations, allowing us to concentrate on strategic domestic market growth.”
The Indian government plays a pivotal role in fostering industry expansion through initiatives such as the National Steel Policy 2017, which sets an ambitious target of increasing per capita steel consumption to 158 kg by 2030.
Apart from facilitating the stakeholders, the government is also working on the country’s commitment to a net zero target by 2070 with schemes such as the Green Hydrogen Mission and the Green Steel Policy. The Green Hydrogen Mission aims to identify and develop regions capable of supporting large scale production and/or utilization of Hydrogen as Green Hydrogen Hubs, while the Green Steel Policy focuses on reduction of carbon emissions in the steel industry through promotion of energy, resource efficiency and use of renewable energy.
The country is currently the second-largest producer of crude steel in the world, having crude steel capacity of 160.3 million tonnes. India produced 126.26 million tonnes crude steel and 122.28 million tonnes of completed steel production in FY23. The country stands as a net exporter of steel witnessing an export of 6.72 million tonnes of finished steel against the import of 6.02 million tonnes in 2022-23.
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However, despite the bright prospects, the Indian steel industry is currently grappling with a variety of challenges.
According to Mr. Anubhav Kathuria, Director at Synergy Steels Limited, “The stainless steel sector currently faces challenges in securing raw materials domestically, leading to imports. Existing basic custom duties (BCDs) on certain raw material imports have led to increased manufacturing costs.”
Mr. Neeraj Raja Kochhar, Chairman & Managing Director of Viraj Profiles Private Limited said, “The operational efficiency and growth of the sector faces hiccups that are both internal and external. The lack of research and development infrastructure, modern machinery, skilled labor and still developing transportation sector are some of the basic challenges that directly affect the quality, productivity and cost effectiveness.
“On the global front, the major challenge lies in cheap imports from China, Taiwan, and South Korea (specific to the wire industry). If we focus on the current scenario, the Suez Canal slowdown, the Russia Ukraine war have caused a major hindrance in the import of raw materials and dispatch of final products to international locations, especially to export-oriented units.”
Addressing these challenges requires a comprehensive approach encompassing innovation, collaboration, and strategic initiatives.
As per Mr. Raman Saraf, Director, Nirmal Wires Private Limited (Group Nirmal), “Fostering closer collaboration between industry players, government bodies, and research institutions can facilitate the development of innovative solutions to tackle issues such as raw material volatility, infrastructure bottlenecks, and regulatory compliance. Besides, investing in advanced technologies and process optimization can enhance efficiency, reduce environmental impact, and bolster competitiveness. Additionally, advocating for fair trade practices and addressing trade barriers to curb the influx of subsidized imports can safeguard the interests of domestic producers.”
According to Mr. Dilip Dev, Chairman of H.D. Wires Private Limited, “The emphasis on developing world-class infrastructure like roads and rail network, dedicated freight corridors as well as opening of new inland river shipping routes and increased speed of goods train, will definitely reduce the logistics cost in the near future. Most wire mills are actively considering the modernization of their existing facilities in order to reduce the cost and technological upgrades.”
Mr. Anubhav Kathuria, Director, Synergy Steels Limited said, “We look forward to the increasing utilization of stainless steel in large-scale infrastructure projects in order to build resilient and robust infrastructure, especially in coastal areas, due to its corrosion resistance properties, which can, as per estimates, curtail annual corrosion-related expenses significantly estimated at USD 100 billion.
“Recently, the global steel and stainless sector has witnessed a number of technological innovations and research initiatives aimed at decarbonizing the sector. Initiatives such as producing green steel from aluminum production waste and developing stainless steel with enhanced corrosion resistance for green hydrogen production hold immense potential for our industry.
“Embracing such technological advancements can not only drive sustainability but enable us to build a greener and more sustainable world. By addressing these challenges and leveraging emerging opportunities, we can navigate towards a more prosperous and sustainable future for the industry – and the world!”
