This document provides an overview of the Indian steel industry. It states that India is the 4th largest producer of crude steel globally, producing around 89 million tonnes in 2011-2012. It also discusses the major players in the industry, reasons for the industry's growth including abundant resources and a strong global presence. The document analyzes the industry using PEST and Porter's Five Forces frameworks and outlines challenges, opportunities and future prospects for further development of the Indian steel sector.

1. STEEL INDUSTRY
ANALYSIS
By(Group 3):
Deepanjan Kundu
Devshuvro Ghosh
Debadrita Ray Chaudhuri
Damyanti Pathak
Abhishek Bose

2. Overview:
• India ranks 5th in the world ranking for production of steel
and fourth largest producer of crude steel in 2011-12 with
89 million tonnes (MT).
• India produced 66.8 million tonnes in 2010-11in comparison
to China’s 626.7 million tonnes.
• About 50% of the steel produced in India is exported.
• India accounts for over 7% of the total steel produced
globally.
• India accounts for around 5 per cent of the global steel
consumption.
• The total employment in the industry is more than 2 million
(including direct and indirect employment).

3. Players in the Industry:
• Tata Steel: wire rods, bars, and steel flats.
• Jindal Steel & Power: mild steel slabs
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and sponge iron.
JSW Steel: gamut of steel products .
Essar Steel: sponge iron, steel and
iron ore pellets.
Rashtriya Ispat Nigam Ltd: liquid steel.
Bhushan Power & Steel Ltd: iron Ore
Beneficiation.
Lloyds Steel: corrugated sheets and
steel coils.
Steel Authority of India Limited: steel
and iron.

4. Reasons for Growth of the Indian
Steel Industry:
• Abundant resources of iron ore.
• Low cost and efficient labour force.
• Strong managerial capability.
• Strongly globalised industry and emerging global
competitiveness.
• Modern new plants & modernised old plants.
Development enhancing facilities:
• Huge Infrastructure demand.
• Rapid urbanisation.
• Increasing demand for consumer durables.
• Untapped rural demand.
• Increasing interest of foreign steel producers in India.

5. PEST Analysis of Indian Steel
Industry:
Political Factors:
•Recommendations on Captive Mines.
•National Steel Policy to Remove Bottlenecks.
Economic Factors:
•GDP Growth Rate.
•Reduction in Customs Duty.
Social Factors:
•Rural-Urban Divide.
•Higher Disposable Income.
Technological Factors:
•Popularity of Steel Portals.
•Application of SML (Steel Markup Language).

6. Michael Porter’s Five Forces
Analysis
Buyers’ Power:
•Increasing Demand for Steel.
•Fragmented Coke Suppliers.
Suppliers’ Power:
•High Raw Material Prices.
•Lack of Transportation.
Intensity of Competition:
•Competition from Foreign Players.
•Spurt in Merger and Acquisition
Activities.
Threat of New Entrants:
•High Cost of Basic Inputs and Services.
•Industry is Capital Intensive.
Threat of Substitutes:
•Use of Aluminium, Plastic, Carbon Fibre.

7. Challenges faced by the Indian Steel
Industry:
• High cost of energy.
• Higher duties and taxes.
• Quality of coking coal.
• Dependence on imports for steel manufacturing
equipments & technology.
Global Impact on the Indian Steel Industry:
• Slow growth in infrastructure development.
• Market fluctuations and China’s export possibilities.
• Global economic slowdown.

8. Government Regulations:
• Emphasis on infrastructural development during the
formulation of the Union Budget 2011.
• Noteworthy reductions in import duties on key steelmaking raw materials.
• To ensure growth of Iron and Steel Sector in India,
Ministry of Steel takes up their issues with the other
concerned Ministries/ Departments such as:
Ministry of Coal for allocation of Coal Blocks and Coal
Linkages to Iron and Steel Industry.
Ministry of Petroleum & Natural Gas for supply of
Natural Gas to Iron and Steel Industry

9. Future Prospects for
Development:
Resources:
•Strong Managerial skills in Iron and Steel making.
•Large pool of skilled Man-power.
•Established steel players with strong skills in steel making.
•Abundant Iron Ore reserves.
Opportunities:
•High economic growth driven increasingly by industry.
•Faster Urbanisation.
•Increased Fixed Asset Building.
•Automobiles and component industry growth.

10. Government Policies:
•Pro-active stance of the government.
•Encouragement for overseas investments.

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