How Can The Steel Industry Give A Much-Needed Boost To The Indian Economy In the Future?

Social Sharing

India now ranks as one of the largest economies in the world with the highest rate of growth in GDP. The country’s economic position can always be improved by developing infrastructure. Steel has played an important role in the economic and infrastructure growth of a country since the Industrial Revolution. It is used in diverse industries like infrastructure, manufacturing, construction, automobiles and more. India is the second largest producer and consumer of crude and finished steel in the world. In India, steel has a multiplier effect of 1.4x on GDP and 6.8x on employment. The growth in the steel sector is expected to improve the economic growth rate of India. The increasing demand for structural steel and its rising applications is expected to give a boost to the steel demand as well as the Indian economy.

How can structural steel help the Indian economy to grow?

In a report from the National Council of Applied Economic Research (NCAER), steel plays a crucial role in a country’s overall development. Structural Steel plays a vital role in building houses, producing cars, and making everyday utensils and packaging. Besides, it can be used for various engineering applications, power generation, petrochemicals, and fertilizers.

The high structural steel demand can increase employment opportunities, especially in Tier III cities. It can multiply the employment rate immensely. India has already taken over the market of steel as the world’s second-largest producer of crude steel. Structural Steel industries in India produced more than 7.2 MMT of structural steel last year. Steel consumption employs more than 20 lakh people annually.

Hence, the structural steel industry has propelled the supply of steel overseas and put the country on the global stage.

India’s demand-supply scenario

India is expected to see a rise in demand for structural steel in the near future. The demand for structural steel is expected to grow at 5.5% in the next five years, compounded annually. Over the last few years, there has been a radical change in the approach to steel consumption. The construction industry has increased its use of structural steel tubes and pre-engineered building materials though it is still way off the global consumption of 10% of total steel use. The current rate of 4-5% leaves a lot of scope for the future. Structural steel has a wide range of applications across diverse industries and is made using the latest technology that results in more durability less steel consumption, minimal wastage and faster project execution.

India has a market edge in  structural steel manufacturing due to the following factors:

  • High-grade iron ore and non-coking coal are two components of steel manufacture which are both available locally.
  • Expanding domestic and international market
  • Thriving MSME sector
  • Having a young workforce and low labour expenses

India still needs to boost its current per capita consumption. Per capita Steel tube usage has moved from 57.6 kg to 74.1 kg over the last five years.

Future of the Steel Industry

India will see a huge demand for steel for affordable urban and rural projects, such as railways, roads, residential buildings, and the domestic shipbuilding industry. Also, steel is used in the defence sector and growth in the automobile sector.

According to the 2017 National Steel Policy, by 2030-31, 300 million tonnes of production capacity will be available. The government is aiming to raise rural steel tube consumption from 19.6 kg per capita to 38 kg per capita by 2030-31.

Despite being the world’s second-biggest steel producer, India is far from being self-sufficient in high-grade steel production. Due to limited resources, the steel sector is also facing low supply ability to the market.

The National Steel Policy 2017 provides the broad framework  has been put in place to promote the growth of an economically competitive, technologically advanced steel industry in India. As a result of this policy, steel manufacturers will be provided with adequate policy support and guidance, and capacity additions will be encouraged. India is ready to become an economic powerhouse.

APL Apollo with a 50% share of the structural steel tubes market, 11 plants, 2.6 MMT  capacity, 800 distributors and over 16 products is ready to make its contribution to India’s success story. Visit www.aplapollo.com for more information.