Posted in Geography, Indian Economy

Iron and Steel Industry In India

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updated on April 8th, 2019

Iron ore is one of the basic mineral resources. Iron obtained from this ore is the basis of modern industrial civilisation. Though iron occurs in the form of a large number of compounds, not all of them are considered viable ores.

The four most important ores of iron are the magnetite, haematite, limonite, and siderite. Iron ore is one of the most widely distributed minerals in India. The important mining areas are Singhbhum in Jharkhand and Keonjhar. Talcher and Mayurbhanj in Odisha. Other important producers of iron ore besides Jharkhand and Odisha are Madhya Pradesh, Chhattisgarh, Goa. Karnataka, Maharashtra and Tamil Nadu Andhra Pradesh, Jharkhand, Goa, Karnataka, Chhattisgarh. Madhya Pradesh, Maharashtra. Odisha and Rajasthan have the haematite reserves and Andhra Pradesh. Jharkhand, Goa. Karnataka and Kerala have reserves of magnetite ore Iron ore is one of the important items of India’s export trade.

Iron and Steel Industry In India

Iron and Steel This industry is basic to industrial development. It is located near the sources of raw material at Jamshedpur, Bumper, Bhadrawati, Bokaro, Rourkela, Durgapur. Bhilai, Salem and Vishakhapatnam Except for the Tata Iron and Steel Company (TISCO) plant at Jamshedpur, all of them are in the public sector The Bhilai and Bokaro plants were established with Soviet collaboration, the Durgapur plant with British collaboration, the Rourkela plant with German collaboration and the Vishakhapatnam plant with Russian collaboration. The Vishakhapatnam steel plant is a shore-based plant to take advantage of cheap transport.

Due to global and domestic factors Indian steel the industry has been faced with certain problems in recent times. India is the fourth largest producer of crude steel in the world (with a total production of 86.5 MT with the installed capacity of around 110 MT today) – having 5 percent share in the global production. Global demand of steel has been near-stagnant (particularly China) – forcing global prices to fall up to 45 per cent in 2015 (in India prices fall has been up to 35 per cent). This has made major global steel producers to ‘push’ steel products into Indian the market, thus raising two major concerns:

(i) A surge in steel imports, and
(ii) Interest of the domestic steel industry hit hard.

The Indian steel industry due to higher borrowings, higher raw material costs with lower productivity is at a comparative disadvantage. The GoI took the following measures to curb the surging steel imports and make domestic production sustainable:

(i) Custom duty increased by up to 2.5 per cent on certain primary iron and steel products.
(ii) Anti-dumping imposed on industrial grade steel imports from China, Malaysia and S. Korea (ranging from US$180 to $316 per tonne). Similar measures were taken by 40 other countries in the world.
(iii) Provisional safeguard custom duty of 20 per cent imposed on hot-rolled flat products of non-alloy and other alloy steel in coils.
(iv) Minimum import price imposed on a number of steel product for a six month period.
(v) Reduced export duty on iron ore to 10 percent for select steel (from 30 percent).

As per the government, any further custom increase will impact the downstream industries as steel is used as an input in different industries. This makes it clear that the Indian steel industry needs to get more competitive via cutting its borrowings and raw material costs together with enhancing productivity.

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