India saw 25.6% rise in steel production in the first eight months of 2021: Report

Despite being hit by the lack of construction activities due to covid-19 for a year, the steel industry has bounced back and had reported a 25.6% growth in crude steel production in the first eight months of 2021, a report by Infomerics Valuation and Rating said.

According to government data, the country’s crude steel production stood at 77.74 million tonnes (mt) in the January-August period of the calendar year 2021, which is a growth of 25.6 per cent over the same period of the previous year.

According to the Infomerics report titled, Steel Industry: Trends & Prospects, along with higher production, the country’s steel exports in FY22 are also expected to surpass that of FY21. The exports have already crossed 70% of FY21 levels. Imports, on the other hand, is expected to maintain their declining trend

The declining imports and rising exports are an indicator of the country moving ahead in its pursuit of self-sufficiency or “atmanirbhar”, said the report.

Although there have been border tensions with China, the steel industry has seen sustained trade flow between India & China. However, that comes with a positive note, i.e., exports accounted for Rs 19,267 crore whereas imports from China accounted for Rs 16,369 crore, the Infomerics report said.

The Indian steel sector contributes approximately 1.5% to its GDP and is one of the core sectors forming the backbone of the economy, providing employment to about 25 lakh persons directly and indirectly. India is the third-largest manufacturing hub of steel pipe in the world and steel pipes constitute 8 to 10% of the steel consumption.

Yet another notable development in the sector is the approval of the PLI Scheme by the cabinet for “Specialty Steel” in India to be implemented over FY24 to FY30 with a budgetary outlay of Rs 6,322 crore. The PLI incentive is expected to boost domestic production of “Specialty Steel” and attract significant investment for its production in the country.

According to Infomerics, the optimism for the industry springs from India’s relatively low per capita steel consumption and the likely rise in consumption. The report specifically mentions surging infrastructure construction, the rapidly developing automobile and railways sectors.

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