Here’s what you can expect in the steel industry by 2025

While multiple conventional and new, disruptive industries contribute to the growth of the economy and at present, steel can prove to be one of the great contributors to India’s growth story and place it as an important manufacturer of steel on a global forum. With the current boost in industries like infrastructure, automobile etc., who are the biggest consumers of steel, an upward trend of growth is expected in the steel industry. The Government has been highly aspirational about the steel industry, by setting a production target of 300 million tonnes. It is pegged to be an important pillar that will fulfil India’s dream of becoming a $5 Trillion economy as it contributes around 2 per cent to India’s GDP.

Currently, India is the second largest producer of steel with 102.5 MT of production and an installed capacity of 142.2 MT. Infrastructure contributes around 62 per cent of the demand of finished steel. This year, Government has allotted sizable spends in enhancing the infrastructure of the country with multiple high-ticket projects like expansion of highway and railway networks and more. This will have a multiplier effect and lead to higher demand for steel.

Government initiatives like the National Steel Policy 2017, steel scrap policy and Production Linked Incentive Scheme, together point towards supporting and bolstering the steel industry through optimum utilization of resources, achieving cost efficiency, incentivization and increasing exports as well as research and development. Additionally, the government policies also aim to enhance the supporting functions like logistics that will make processes more efficient and bring an ease in doing business for steel companies.

As the Government expedites support to the steel industry through several policies and strategic moves, at an organizational level, steel players should focus on enhancing production, especially with the help of latest technological interventions

At the industry level, veteran and celebrated leaders who have a granular understanding of the steel industry should collaborate and focus on product innovation that enhance our product offering. A unique product offering would help penetrate deeper in the existing markets, enter newer markets, and command a better pricing.

While the aspirations for steel industry for 2025 are aspirational, they are achievable. However, the path is filled with challenges and roadblocks like land acquisition, lack of cheap finance options, power shortages in several areas as well as lack of raw material. Additionally, complex supply chain, intense production processes and lack of infrastructure and technology collectively make the process tedious and time consuming. However, government’s focus and support to the sector and intelligent strategy execution by players, along with improvement in the business environment is expected to bring a considerable growth in the steel sector.