India is the second largest producer and consumer of steel next to China. The steel industry contributes around 2% of the GDP and employs 500,000 people directly and 2.5 million indirectly. Steel is fundamental to the growth of a country. So, let us talk about this industry.

1. Indian Steel Industry by Sam Ghosh 17th February 2020

2. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this?
Why talk about this? Demand Side Supply Side Current TrendsRegulations

3. Indian Steel Industry by Sam Ghosh 17th February 2020
Global Perspective
Why talk about this? Demand Side Supply Side Current TrendsRegulations

4. Indian Steel Industry by Sam Ghosh 17th February 2020
● India was the second-largest producer of steel globally in 2019.
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Data: World Steel Association estimates
Global Perspective Indian Perspective

5. Indian Steel Industry by Sam Ghosh 17th February 2020
● India was the second-largest consumer of steel globally in 2019 as per estimates
of the World Steel Association.
● Indian consumption is expected to grow 5%-7% compared to global 1.7% - 3.9%
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Global Perspective Indian Perspective
Data: World Steel Association estimates

6. Indian Steel Industry by Sam Ghosh 17th February 2020
Indian Perspective
Why talk about this? Demand Side Supply Side Current TrendsRegulations

7. Indian Steel Industry by Sam Ghosh 17th February 2020
● One of the Eight Core Industries with weight of 17.9%
● Contributes around 2% of the GDP and employs ~500,000 people directly and
~2.5 million indirectly as per Indian Brand Equity Foundation.
● Output multiplier effect of 1.4X on GDP and employment multiplier factor of 6.8X
as per National Steel Policy 2017.
● As per Ministry of Steel data, India is a net-exporter of finished steel.
○ Export by India 6.8 million tonnes (Apr 2019 - Jan 2020)
○ Import by India 5.9 million tonnes (Apr 2019 - Jan 2020)
■ Net Export ~0.9 million tonnes
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Global Perspective Indian Perspective

8. Indian Steel Industry by Sam Ghosh 17th February 2020
Demand Side
Why talk about this? Demand Side Supply Side Current TrendsRegulations

9. Indian Steel Industry by Sam Ghosh 17th February 2020
Domestic Export
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Data: Projected by World Steel Association

10. Indian Steel Industry by Sam Ghosh 17th February 2020
Domestic Export
Why talk about this? Demand Side Supply Side Current TrendsRegulations
● The National Steel Policy 2017 aims to increase per capita consumption to 160
Kgs by 2030-31.
Data: Ministry of Steel

11. Indian Steel Industry by Sam Ghosh 17th February 2020
Domestic Export
Why talk about this? Demand Side Supply Side Current TrendsRegulations
● Infrastructure Investments
○ National Infrastructure Pipeline (NIP) - investment of $1.4 trillion in five years.
○ Investment in Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to
around 70% of the projected capital expenditure.
● Automobile Sector
○ A slowdown in the short term.
○ Dealing with the implementation of emission regulations, rise of sharing economy and
economic slowdown.
○ The Automotive Mission Plan 2016-26 (AMP 2026) - aims to make Indian Automotive industry
among the top three of the world in engineering, manufacture and exports of vehicles &
components...12% of India GDP (from 7.5% now) and generating an additional 65 million jobs.
● Real Estate
○ Real estate sector in India is expected to reach US$ 1 trillion by 2030. By 2025, it will
contribute 13 per cent of the India GDP as per the Indian Brand Equity Foundation.
Steel Demand = (Infrastructure Investments + Automobile Industry + Real Estate ...

12. Indian Steel Industry by Sam Ghosh 17th February 2020
Domestic Export
Why talk about this? Demand Side Supply Side Current TrendsRegulations
● India is a net-exporter of steel and exported around 13.06 million tonnes in
CY 2019 as per Indian Steel Association.
● Exports increased 23% in 2019 from 2018 as per Indian Steel Association.
● Flats comprise of 64% of exports, 28% Semis and rest longs.
Data: Ministry of Steel

13. Indian Steel Industry by Sam Ghosh 17th February 2020
Supply Side
Why talk about this? Demand Side Supply Side Current TrendsRegulations

14. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Domestic Import
Data: Ministry of Steel
● India is the 2nd largest producer of steel in the world with 111.2 million tonnes in
CY 2019. - 5.9% of Global Production

15. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Domestic Import
● Production of finished steel by sector (FY 2019-20 till December 2019)
○ Private: 81.3%
○ Public 18.7%
Data: Ministry of Steel

16. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Domestic Import
● Indigenous availability of high grade iron ore and non-coking coal helps the
industry.
● Production capacity is structured in between BF-BOF (44%), EAF (26%) and IF
(30%) as per the Ministry of Steel..
BF-BOF: Blast-Furnace - Basic Oxygen Furnace, EAF: Electric Arc Furnace, IF: Induction Furnace
● Indian steel production still has quality issues - often not suitable for high end
applications- electrical steel, special steel and alloys for power equipments,
Aerospace, Defence, Nuclear etc.
○ Limited availability of essential raw material such as high grade manganese
ore & chromite, coking coal, steel grade limestone etc.
○ Lack of R&D investments

17. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
Domestic Import
● In Q1-Q3 of FY 2019-20, India imported 5.51 million tonnes of finished steel as per
Ministry of Steel
● 70% of the imports are Non-Alloy, 17% Alloy and 13% Stainless steel.
● India imports primarily Hot-Rolled Coils, Galvanized Sheets, Cold Rolled
Sheets/Coils, Electrical Steel etc.
Data: Ministry of Steel

18. Indian Steel Industry by Sam Ghosh 17th February 2020
Regulations
Why talk about this? Demand Side Supply Side Current TrendsRegulations

19. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
National Steel Policy Foreign Investment Trade Policy Research
National Steel Policy 2017 - intends to convert Indian steel industry to a technologically
advanced and globally competitive steel industry
● Objectives:
○ Build a globally competitive industry
○ Increase per Capita Steel Consumption to 160 Kgs by 2030-31
○ Domestically meet entire demand of high grade automotive steel, electrical steel, special
steels and alloys for strategic applications by 2030-31
○ Increase domestic availability of washed coking coal so as to reduce import dependence
on coking coal to ~65% by 2030-31
○ To have a wider presence globally in value added/ high grade steel
○ Encourage industry to be a world leader in energy efficient steel production in an
environmentally sustainable manner.
○ Establish domestic industry as a cost-effective and quality steel producer
○ Attain global standards in Industrial Safety and Health
○ Substantially reduce the carbon foot-print of the steel industry

20. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
National Steel Policy Foreign Investment Trade Policy Research
Foreign Investment Policy
● 100% Foreign Direct Investment (FDI) is allowed in the allowed in the steel sector
under automatic route.
● April 2000 - June 2019 : US$ 11.38 billion FDI in the metallurgical industries as per
Indian Brand Equity Foundation.
● Imports of foreign technology are also freely permitted in this sector.

21. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
National Steel Policy Foreign Investment Trade Policy Research
Trade Policy
Iron and Steel are freely importable and exportable
Indian Steel Industry
Iron/Steel and
articles made of
Iron/Steel
Raw Materials
No Import Duty
Export duty on Iron
Ore, Manganese
etc.
15% Import duty
No export duty

22. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
National Steel Policy Foreign Investment Trade Policy Research
● The import duty on Iron or Steel and Articles of Iron or Steel is 15% (Chapter 72
and 73 of the Customs Tariff Act 1975).
● Inputs for the manufacture of iron and steel intermediates are exempted from
import duties as per Chapter-72 of the Customs Tariff Act 1975.
● Export duties on the raw materials to steel production (Second Schedule Customs
Tariff Act 1975-
○ Iron ore and concentrates 30%
○ Manganese ore Rs. 20 per tonne
○ Chromium ores and concentrates 30%
● Anti-dumping duties
○ Flat Rolled steel products originating in, or exported from China, Vietnam and Korea

23. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations
National Steel Policy Foreign Investment Trade Policy Research
Research and Development
● India imports several high performance and value added steel products such as
electrical steel, automotive grade steel and steels for specialized use in defence,
space and nuclear applications - closely held technology by firms in USA, Japan
and South Korea.
● At the same time the investment on R&D by the large steel companies in India is in
the range of 0.07%-0.58% of sales turnover compared to 1% for companies in
USA, Japan and South Korea.
● Ministry of Steel’s Initiatives to promote R&D
○ Promotion of R&D in Iron & Steel Sector Scheme - financial support for R&D projects by Academic
Institutions/ Research Laboratories and Indian Steel Companies.
○ Steel Development Fund (SDF)
○ Impacting Research Innovation & Technology (IMPRINT) & Uchchatar Avishkar Yojana (UAY)
Schemes
○ Steel Research & Technology Mission of India (SRTMI) - Industry driven initiative to take up research
projects of national importance.

24. Indian Steel Industry by Sam Ghosh 17th February 2020
Current Trends
Why talk about this? Demand Side Supply Side Current TrendsRegulations

25. Indian Steel Industry by Sam Ghosh 17th February 2020
Why talk about this? Demand Side Supply Side Current TrendsRegulations

26. Indian Steel Industry by Sam Ghosh 17th February 2020
Thank You