Examine the structure, strengths and weakness of India's steel industry. Given that the Indian steel sector is poised to be the world's second largest, what opportunities and threats you perceive for this industry. Discuss.

The Irons and steel industry of India can be divided into three categories of players’ viz. Main producers, major producers and secondary producers. SAIL, RINL, TISCO etc. are main players who account for around 50% of total steel production. ESSAR, ISPAT, JVSL etc. are other major players which account for around 20% of the production. The secondary producers make the dispersed segment of the industry mainly comprising of MSME sector such as Sponge iron producers etc.
The strengths of India’s steel industry include: abundant availability of iron ore and coal; low labour costs, abundant manpower, mature production base and supporting government policy, particularly towards MSME sector. However, the major weakness include unscientific mining and production, low productivity, energy inefficiency, dependence on coal imports despite huge reserves, inadequate infrastructure, regulatory hurdles etc.
Currently, India is third largest producer of steel in the world and in near future, it is going to be second largest country. The key opportunities include an unexplored rural market to boost consumption of steel, growing domestic demand for steel products including automobiles, growing demands in exports. But there are several threats. Firstly, China is a net exporter of steel and is already posing hurdles by importing raw material from India and selling it after processing. Secondly, the increases protectionism in west hinders the growth of exports of India.

Question for UPSC Mains:
Examine the structure, strengths and weakness of India’s steel industry. Given that the Indian steel sector is poised to be the world’s second largest, what opportunities and threats you perceive for this industry. Discuss.

Published: July 28, 2017 | Modified:October 15, 2020

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