Daily Hot Topic
Topic : India’s Steel Production to Surpass 300 Million Tonnes by 2030

GS-3 Mains  : Economy

In News

India’s steel production is expected to exceed 300 million tonnes (MT) by 2030, driven by robust demand for government infrastructure projects.

Status

India is currently the world’s second-largest producer of crude steel, having surpassed Japan in 2018. The demand for steel remains robust, fueled by the government’s push for infrastructure, and the industry anticipates growth of around 10 percent. The steel sector is a critical pillar of India’s economic and industrial framework.

Importance

• Economic Growth: The steel industry significantly contributes to India’s GDP and is a major source of employment, providing jobs across a range of skills from high-tech engineering roles to manual labor.
• Infrastructure Development: Steel is essential for constructing bridges, highways, railways, and buildings due to its strength, durability, and versatility.
• Industrial Expansion and Technological Advancements: Continuous efforts to enhance production efficiency, reduce costs, and develop high-quality steel products characterize India’s steel industry. It also supports the growth of other high-tech sectors, including automotive, aerospace, and defense.
• Global Trade and Collaboration: The steel industry’s presence in global trade enhances India’s economic influence and establishes it as a key player in global steel production.
• Strategic Importance: Steel is crucial for producing defense equipment, infrastructure critical to national security, and emergency response capabilities.

Challenges

• Raw Material Availability: Volatility in the supply and pricing of raw materials, particularly iron ore and coal, poses a challenge. Inefficiencies in logistics increase operational costs and affect the competitiveness of Indian steel producers in the global market.
• Competition: India remained a net importer of steel during the first three quarters of FY24 due to price differentials between international and domestic finished steel prices.
• Environmental Concerns: Steel production is energy-intensive and generates substantial greenhouse gas emissions. India’s steel sector accounts for 12% of the country’s greenhouse gas emissions, with an emission intensity of 2.5 tonnes of CO2 per tonne of crude steel, compared to the global average of 1.9 tonnes of CO2 per tonne of crude steel.

Initiatives

• SIMS 2.0 Portal: The Union Minister of Steel and Heavy Industries launched the upgraded Steel Import Monitoring System to provide actionable intelligence for effective decision-making and strategic planning.
• National Steel Policy 2017 (NSP 2017): Aims to achieve a crude steel capacity of 300 MTPA and a crude steel demand/production of 255 MTPA by 2030-31.
• Productivity Linked Incentive (PLI) Scheme: 57 MoUs with 27 companies have been signed under the PLI Scheme.
• ‘Brand India’ Labeling: Promoting a “Made in India” brand for domestic steel.
• PM Gati Shakti National Master Plan: The Ministry of Steel has identified 22 critical infrastructure gaps and is coordinating with other ministries to address them.
• Union Budget 2024-25: Provides several incentives for the steel industry, including import duty cuts on several raw materials and indirect benefits from increased spending on infrastructure and affordable housing.

Conclusion and Way Forward

The Indian steel industry faces multiple challenges, from raw material supply and environmental regulations to global competition and technological advancements. Addressing these issues is crucial for ensuring the sector’s continued growth and sustainability. By embracing innovation, improving infrastructure, and navigating regulatory landscapes effectively, India’s steel industry can continue to play a vital role in the nation’s economic and industrial development.