Indian Steel Industry Booms with $130 Billion of Active Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's iron and steel industry is more than a century old, beginning when Tata Steel (BSE:500470) (Mumbai) set up its first integrated plant in 1907. Ever-increasing demand from various sectors such as infrastructure, real estate and automobiles has put India's steel industry on the world map. A rapid rise in production has helped India become the fourth-largest producer of crude steel and the largest producer of sponge iron in the world.

The Indian steel industry entered into a new era of development during 2007-08, riding high on the country's resurgent economy and rising demand for steel. Adoption of the New Industrial Policy by the Indian Government opened up the iron and steel sector for private investment in early 1990s. It was the first core-sector industry to be completely freed from the licensing regime and the pricing and distribution controls. The import of foreign technology as well as foreign direct investment is freely permitted up to certain limits. This, along with many other pro-industry initiatives taken by the government, has given a definite impetus for entry, participation and profit for the private players in the Indian steel industry.

While most of the older units in India are now being modernized and expanded, a large number of new greenfield steel mills are also coming up in different parts of the country that are based on modern, efficient and state of-the-art technologies. Indian states like Jharkhand, Andhra Pradesh, Orissa, Karnataka, Chhattisgarh, Maharashtra, West Bengal and Bihar have emerged as the major destinations for the foreign investors.

Industrial Info Resources is presently tracking 402 active steel projects, with a combined total investment value of more than $130 billion.

Click on the image at right to view a chart showing the breakdown of Indian steel manufacturing projects by state.

Out of all of the Indian states, the state of Chhattisgarh has the highest number with 86 upcoming projects, followed by 78 projects in Orissa, and 69 in Jharkhand. The Southern Indian states of Karnataka and Andhra Pradesh have 47 and 25 projects, respectively.

India's steel demand growth is much higher than the rest of the world. The country's steel demand has increased 14% in the past two years, compared to the average global demand growth of 6% for the rest of the world. Based on the assessment of current ongoing projects, both greenfield and brownfield, India's share in the world's steel production stands at 5%, and the current production of 70 million tonnes per annum (MTPA) is expected to go up to 200 MTPA by 2020. Major players in the Indian steel sector are Steel Authority of India Limited (SAIL) (BSE:500113) (New Delhi), Tata Steel and Rashtriya Ispat Nigam Limited (RINL) (Visakhapatnam, Andhra Pradesh).

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Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.