Why in the news?
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) recently held a conference titled Indian Metal Industry: Current Outlook and Future Trends.
What is the current state of the Indian metal industry?
With the rise of industrialised economies at the turn of the twentieth century, countries with strong metal industries benefited from a first-mover advantage.
Metals have been a key motivator of industrialisation.
According to statistics, India was the world’s “Second-Largest Producer” of crude steel in October 2021, with an output of 9.8 MT. In FY22 (till January), crude steel output was 98.39 MT and completed steel production was 92.82 MT, respectively.
During the fiscal year 2021-22, per capita steel consumption in India increased by 10% to 77 kg.
According to preliminary estimates, India exported a record 13.5 million tonnes of completed steel in 2021-22, while producing a record 120 million tonnes of crude steel and 113.6 million tonnes of finished steel.
The domestic availability of raw materials such as iron ore and cost-effective labour has fueled growth in the Indian steel business.
As a result, the steel industry has been a significant contributor to India’s manufacturing output.
The Indian steel sector is cutting-edge, with cutting-edge steel mills.
- It has always sought for ongoing modernisation of ageing units and energy efficiency upgrades.
- India is a natural location for the mining and metal sector due to its vast quantities of iron, coal, dolomite, lead, zinc, silver, and gold.
- Steel has long held a leading position among metals. Steel production and consumption are widely recognised as indications of economic advancement, industrial development, and forms the backbone of any economy, and are predicted to rise in the coming years as government incentives increase.
- The metals and mining sector in India is expected to undergo significant reform in the coming years as a result of reforms such as the Make in India Campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy, as well as an increase in infrastructure development.
- The average index of industrial production of basic metals manufacturing in FY 2021-22 is 177.3, up 18.4 percent over the previous year.
- Recognizing the necessity of bringing sustainability to coal mining, the Ministry of Coal and all coal PSUs have established a “Sustainable Development Cell” to promote the implementation of better environmental management practises in coal mines.
- The metal industry, particularly iron and steel, requires substantial capital investments that a developing country like India cannot afford. Many of the public sector integrated steel factories were built with the assistance of foreign aid.
- Low Productivity: The country’s per capita labour productivity in the steel industry is 90-100 tonnes, which is quite low. In Korea, Japan, and other steel-producing countries, it is 600-700 tonnes per person.
- Low Capacity Utilization: The Durgapur steel plant only uses about half of its potential due to problems such as strikes, raw material shortages, energy crises, poor administration, and so on.
- Huge Demand:
- Massive amounts of steel and other metals will be imported to meet demand. Productivity must be increased in order to conserve important foreign exchange.
- Poor Product Quality: Due to a lack of infrastructure, capital inputs, and other facilities, the metallurgical process becomes more time-consuming, expensive, and generates a poorer variety of alloys.
What are the government’s metal sector initiatives?
- 2017 National Steel Policy (NSP).
- Policy on Steel Scrap Recycling
- Specialty Steel PLI Scheme
- Purvodaya Mission: Steel Sector Accelerated Development
- India’s Steel Research and Technology Mission
- Fourth Industrial Revolution Adoption (Industry 4.0).
- Industry and other stakeholders will need to identify all of the regions and reasons that are contributing to an increase in consumption of these metals in order to improve availability for the common man at an affordable price.
- It is critical to boost domestic competence through technological growth and innovation. This would not only allow India’s metal and metallurgy sector to become genuinely global, but will also contribute to India becoming a manufacturing hub for metals and metal goods.
- It is critical that various industry organisations travel to rural India and enlighten the people about government programmes through local gatherings or seminars. They can operate skill development programmes and contribute significantly to nation building.
- It is critical to cut costs by implementing technology and smart working practises.
- It is stated that India has a competitive advantage over its peers in steel production due to the domestic availability of high-quality iron ore, strong domestic demand, and the availability of a young labour.
- Because of the abundance of minerals in the country, the metal sector has the potential to play a significant role in the country’s ambitious objectives for Self-Reliant India and a USD 5 trillion economy by 2024-25.
- It is vital to rationalise the need for the development of mineral reserves in the country, particularly minerals such as iron, coal, bauxite, lime, copper, manganese, chromium, and so on, which are the foundation of economic development.
- India’s very low per capita steel consumption, as well as the predicted increase in consumption due to expanded infrastructure construction and the thriving automobile and railway sectors, present enormous opportunities for expansion.