Global and Indian steel industry and its role in the development of economies
Steel

Global and Indian steel industry and its role in the development of economies

Steel is used in almost every aspect of our lives from cars to refrigerators to washing machines to roads, bridges, ships, airplanes, etc, and extensively in engineering and construction work. Therefore, production and consumption of steel can be directly linked to the socio-economic development of a country. Steel has played a crucial role in the development of many large economies.

Steel consumption significantly depends on the overall performance of the economy (GDP) and more specifically on investments made in infrastructure like railways, ports, roads, airports and housing.

At the global level, 3.6 per cent growth in GDP for the period of around three decades was associated with 3 per cent growth in steel consumption. The GDP of India grew from 1990 to 2018 at 6.6 per cent and its steel consumption grew by 6 per cent in this period.

India: 3rd largest steel consumer

India is the third largest finished steel consumer in the world and is likely to surpass US to become the second largest in 2019. However, the per capita consumption of crude steel in India stood at just 77 kg in 2018 against the world average of 240 kg. This is consistent with India's low income per capita. India's low steel consumption partly reflects its limited urbanisation but also indicates the high potential that exists given that it has potential to grow by 8-9 per cent per annum given the lacunae in the infra space. This strong growth potential can be reached in terms of consumption, although the speed of this increase will largely be determined by the rate at which India urbanises and industrialises.

Steel has played an important role in the development of the Indian economy. India’s crude steel consumption rose from 22 million tonne in 1990 to 105 million tonne in 2018. According to the Ministry of Steel, the sector contributes around 2 per cent of the country's GDP and employs around 25 lakh people in steel/allied sectors. Evidently, the steel industry is important for the country because it has one of the highest economic linkages in overall GDP.

Steel demand in India is expected to grow driven by various government-led initiatives in affordable housing and infrastructure sector, coupled with robust growth in automotive and capital goods segments. Also, the NSP is expected to encourage domestic production of steel and reduce imports. This is expected to benefit the domestic steel companies. Lower exports from the world’s second largest steel producer are a cause of concern. The domestic steel industry has the potential to be a net exporter. This is possible if the government looks at rationalising the cost structure, develop efficient logistics and infrastructure, and make funding available at cheaper rates. As China enters a phase of moderate growth in steel demand, India is expected to have healthy domestic demand for steel given its low per capita steel consumption and low income per capita and scope for urbanisation.

CARE Ratings’ ‘Global and Indian Steel Industry’ report studies the trend in the global and Indian steel industry during the period 1990-2019. It looks at the trend in global steel production, consumption and capacity and the movement in prices of steel and raw materials over this period. The study further dwells into the problem of global overcapacity of steel and measures taken by the countries to address the same. It also takes a look at the measures taken by the Indian government to contain the flow of cheap imports into the country, resolve the NPA problem and policies measures that helped in growth of Indian steel industry.

Read more in the report on the trend in the global and Indian steel industry!

Steel is used in almost every aspect of our lives from cars to refrigerators to washing machines to roads, bridges, ships, airplanes, etc, and extensively in engineering and construction work. Therefore, production and consumption of steel can be directly linked to the socio-economic development of a country. Steel has played a crucial role in the development of many large economies. Steel consumption significantly depends on the overall performance of the economy (GDP) and more specifically on investments made in infrastructure like railways, ports, roads, airports and housing. At the global level, 3.6 per cent growth in GDP for the period of around three decades was associated with 3 per cent growth in steel consumption. The GDP of India grew from 1990 to 2018 at 6.6 per cent and its steel consumption grew by 6 per cent in this period. India: 3rd largest steel consumer India is the third largest finished steel consumer in the world and is likely to surpass US to become the second largest in 2019. However, the per capita consumption of crude steel in India stood at just 77 kg in 2018 against the world average of 240 kg. This is consistent with India's low income per capita. India's low steel consumption partly reflects its limited urbanisation but also indicates the high potential that exists given that it has potential to grow by 8-9 per cent per annum given the lacunae in the infra space. This strong growth potential can be reached in terms of consumption, although the speed of this increase will largely be determined by the rate at which India urbanises and industrialises. Steel has played an important role in the development of the Indian economy. India’s crude steel consumption rose from 22 million tonne in 1990 to 105 million tonne in 2018. According to the Ministry of Steel, the sector contributes around 2 per cent of the country's GDP and employs around 25 lakh people in steel/allied sectors. Evidently, the steel industry is important for the country because it has one of the highest economic linkages in overall GDP. Steel demand in India is expected to grow driven by various government-led initiatives in affordable housing and infrastructure sector, coupled with robust growth in automotive and capital goods segments. Also, the NSP is expected to encourage domestic production of steel and reduce imports. This is expected to benefit the domestic steel companies. Lower exports from the world’s second largest steel producer are a cause of concern. The domestic steel industry has the potential to be a net exporter. This is possible if the government looks at rationalising the cost structure, develop efficient logistics and infrastructure, and make funding available at cheaper rates. As China enters a phase of moderate growth in steel demand, India is expected to have healthy domestic demand for steel given its low per capita steel consumption and low income per capita and scope for urbanisation. CARE Ratings’ ‘Global and Indian Steel Industry’ report studies the trend in the global and Indian steel industry during the period 1990-2019. It looks at the trend in global steel production, consumption and capacity and the movement in prices of steel and raw materials over this period. The study further dwells into the problem of global overcapacity of steel and measures taken by the countries to address the same. It also takes a look at the measures taken by the Indian government to contain the flow of cheap imports into the country, resolve the NPA problem and policies measures that helped in growth of Indian steel industry. Read more in the report on the trend in the global and Indian steel industry!

Next Story
Infrastructure Urban

DCPC Prepares for Special Campaign 5.0 with Focus on E-Waste

The Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals and Fertilisers, is gearing up for Special Campaign 5.0, to be held from 2nd to 31st October 2025. The initiative will focus on e-waste disposal as per MoEFCC’s E-Waste Management Rules 2022, space optimisation, and enhancing workplace efficiency across field offices.Special Campaign 4.0, conducted between October 2023 and October 2024, delivered notable results in record management, grievance redressal, scrap disposal, and cleanliness drives.Key outcomes of Special Campaign 4.0Records management: 2,443 physical fil..

Next Story
Real Estate

BlackRock India Leases 1.4 Lakh Sq Ft in Bengaluru

BlackRock Services India, the domestic arm of global asset manager BlackRock, has leased 1.4 lakh sq ft of office space at IndiQube Symphony in Bengaluru, according to Propstack data. The 10-year deal is valued at around Rs 4.10 billion.The lease, among the largest transactions in India’s co-working sector, highlights the growing preference of global institutions for flexible office providers. The agreement, commencing October 1, 2025, covers ground plus five floors in KNG Tower 1 at Ashoknagar, MG Road — one of Bengaluru’s prime commercial hubs.As per the lease document, BlackRock will ..

Next Story
Infrastructure Transport

L&T Bags Rs 25–50 Bn Order for Mumbai-Ahmedabad Bullet Train Track Works

Larsen & Toubro’s (L&T) Transportation Infrastructure business has secured an order valued between Rs 25 crore and Rs 50 billion from the National High Speed Rail Corporation Limited (NHSRCL) for the Mumbai-Ahmedabad High Speed Rail (MAHSR) corridor.The contract, Package T1, involves the design, supply, construction, testing, and commissioning of 156 route km of high-speed ballastless track on a Design-Build Lump Sum Price basis. The stretch runs from Mumbai’s Bandra-Kurla Complex to Zaroli village in Gujarat and includes 21 km of underground track and 135 km of elevated viaduct.Se..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?