Contribution of Steel Industry in Indian Economy
Steel plays an important role in contributing to the development of a country and accelerating its growth. It is also the backbone of human civilization and is used in manufacture of electrical machinery, metal products, textile and transport equipment etc. Steel is a product of a technologically multifaceted and large industry. In 2006, India ranked as the 5th largest country in production of steel globally. The country has the richest coal and iron ore mines and its cost of production is lower compared to that of other countries. The country has also maintained lead position as the largest producer of sponge iron globally. In 2010, the production of steel in the country was 1414 million tonne which was a 15% growth from 2009. If expansion plans proposed are implemented according to schedule, then the country will become the 2nd largest producer of steel globally by 2015-2016.
India enjoys several advantages because of its dominant position in the steel industry on the global map. These include the following:
- Establishment of new steel plants that have state of the art technology. This is done without dependence on aid.
- Continued modernization and implementation of technology upgrading and de-bottlenecking schemes in the old plants.
- Improved energy efficiency in the plants in regard to power and coke rate consumption.
- Use of better raw materials
- Optimum processing of its raw materials such as washing of coal, sintering and beneficiation of iron ore.
Global integration of the Indian economy and the increasing demand by sectors like real estate, infrastructure, as well as automobile locally and abroad has also contributed in making Indian steel the fastest expanding industry. According to the information available, the consumption, export and production of finished steel during April to December 2007 were up by 68.7 percent over the previous year’s record. Consumption pace growth has outpaced production making the country the net steel importer.
The steel industry in India is classified into Main producers such as Tata Steel, Vizag Steel and Sail plants, Major producers which include plants that have a steel making capacity that is above 0.5 million tonne-Essar Steel and other producers. The latter is comprised of different plants that deal with crude/finished steel production and they can be found in different sections of the country.
The critical materials in the steel industry include manganese ore, chrome ore and iron ore which are of critical importance. Their assured and timely availability and in adequate quantities and great quality on long term basis is what is required to ensure the continued growth of the sector. In essence, the steel industry in the country is one of the greatest contributors to its overall GDP.
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