Indian Steel Industry

The Indian steel industry is one of the industries that contribute significantly to the GDP of the country. Citing the high potential that this iron and steel industry holds, the government never leaves a chance to make it grow. This constant effort by the Indian government can be illustrated by the fact that India is the second-biggest producer of steel today. This success is attributed to the skill training programmes conducted by the government for the iron and steel industry in India. Modernisation of the steel plants and the use of high-end technology have also helped the industry’s growth. Hence, we have come up with this article that candidates must go through to understand how the Indian steel industry works.

Significance of the Iron and Steel Industry

Knowing the significance is very crucial before understanding how the Indian Steel Industry works. The iron and steel industry in India has a pivotal role to play in the development of the country. Go through the sections below to know what significance the industry holds:

• The location of the iron industry provides ample employment opportunities to the people, thus contributing to the GDP percentage.
• The presence of the iron and steel industry in the country takes it high in the modernity index. This is because the final index is calculated by considering the number of steel companies functioning in the country.
• Indian steel companies are the backbone of several industries such as energy, automobile, construction, and appliances. 
• A large part of the GDP comes from the exports of a country. The Indian Steel industry is a predominant contributor to the GDP of our country. This can be attributed to the fact that India’s iron and steel industry contributes 2% to the national GDP.

Top 5 Indian Steel Companies

As of now, India has a total of 3647 iron and steel companies which is a mix of small, medium and large industries. However, out of them, there are five big Indian steel industries that have significantly contributed to the growth of the industry. Hence, before understanding how the Indian steel industry works, it’s important to learn the history of the top 5 Indian steel companies:

SAIL 

SAIL (Steel Authority of India) was established by the Indian government in 1954 with five plants located at Durgapur, Bokaro, Bhilai, Rourkela and Burnpur. Today, the company is known to be the top producer of steel in India. The company is headquartered in Delhi, India and is home to 65,807 employees.

TATA Steel

Founded by Jamshedji Tata in Jamshedpur, Jharkhand, this company is the second-highest producer of steel in the country. The reason for the success of the company is the availability of iron ore at cheaper rates. This is one of the iron and steel companies that has managed to generate huge profits over the years.

Jindal Steel and Power

OP Jindal Group founded Jindal Steel and Power in 1982 by Sajjan Jindal and now operates in more than 10 countries across the globe. Currently, the company has an annual steel production worth 8.6 metric tonnes per annum.

Essar Steel India Limited

Essar Steel India Limited is backed by Arcelor-Mittal Nippon Steel India Limited and has been one of the fastest-growing iron and steel companies in India. Apart from steelmaking, the company is also invested in iron ore and pellet making.

Rashtriya Ispat Nigam Limited

RINL is a subsidiary of the Indian government and is also a certified ‘navratna’ of the country. The company has been known to produce at least 7.3 metric tonnes per annum. The company is also likely to invest INR 60,000 per annum till 2027 to increase its production capacity.

Challenges Faced by the Iron and Steel Industry in India

Similar to other industries, the iron and steel industry in India also faces a lot of challenges in its operations. Out of these, some are small and can be solved with a few interventions. However, some are big and require high-level intervention. These challenges hamper the overall working of the industry and are a roadblock to those who wish to have an understanding of how the Indian steel industry works. Here are a few challenges faced by the Indian steel industry:

• Investment is difficult to find since the industry requires exponentially high capital for smooth operations.
• Under-utilisation of manpower, raw materials and mismanagement of funds is another hurdle that challenges the working of the Iron and Steel industry in India.
• Unavailability of adequate credit from financial institutions owing to the bad balance sheet. This is because most credit companies and banks do not have a basic understanding of how the Indian steel industry works. 
• The rise in global competition with countries like China, Japan, Korea, etc., supplying cheaper steel is also adverse to the growth of the Indian steel industry.

Growth of the Indian Steel Industry

As per a report, the production of crude steel in the financial year 2021 stood at 102.49 MT, and the figures for finished steel were 94.66 MT. The report further stated that the export of Indian steel has soared by 121.6% as compared to the previous year. Several factors have been attributed to the Iron and Steel industry’s increased capacity in India. Also, citing the high investment by the government, the introduction of high-end technology and developed infrastructure, this industry is likely to grow at an exponential rate. It is hence always advised to go through the statistics before getting an understanding of how the Indian steel industry works.

Conclusion

This explanatory article gives details on how the Indian steel industry works. This is one of the most important topics for the upcoming railway exams. Hence, with this article, we have tried to impart a correct understanding of how the Indian steel industry works. Apart from the Railway exam, India’s iron and steel industry is a crucial topic for the banking, SSC, UPSC and state PCS and other government-aided exams.