Metal Industry: Current Outlook And Future

The metal industry is one of the most flourishing industries and one of the core industries of India contributing more than 2% to the total GDP of India. India has some of the largest natural resources for crude steel and stood as the second-largest producer of crude steel in the world. For the financial year 2022, the total crude steel production was around 98.93 MT while the finished steel production stood at around 92.82 MT. And it is expected that the crude steel production of India will cross 120 million tonnes by the end of the financial year 2022.

Current Status of the Metal Industry in India:

The present condition of the metal industry in India is quite decent and every year the total production of steel is multiplying significantly. At present, the metal industry of India provides raw materials to the Automobile industry, construction industry, and other metallurgical industries. Every year the metal industry of India provides revenue of more than Rs 5000 crores to the GOI. Also with the advancement in technology and with the help of the state of the art technology the metal industry of India developed many alloys from the existing metals. In past times India was only a major producer of Raw steel, Mild steel, stainless steel, and aluminium. But today a variety of high-grade metals and alloys are available in the Indian Metal industry like titanium, Hastelloy, Inconel, Monel, etc. The metal industry of India directly or indirectly employs more than 25 lacs people in India and thus acts as one of the major industries of India. 

In the financial year 2021-22, India exported more than 13.5 million tonnes of Furnished Steel.

Government Initiatives for the Development of Metal Industries in India:

The government of India has launched many initiatives for the development of the metal industry in India and some of them are discussed below. 

• Russia and India signed an MoU together on the research and development of the production of coking coals which is an active ingredient required in the making of steel.
• The Government of India allocated a fund of Rs 47 crores for the steel industry of India to boost the economic growth of the nation.
• The Ministry of Economic and trade of India has signed a MOC (Memorandum of cooperation) with the government of Japan to expand the joint trade between the two nations.
• The import duty and other taxes on steel items have been reduced by 2.5% twice by the government of India to boost the foreign trade.
• The NSP (National Steel Policy), 2017 has been approved by the union government as it aims to increase the domestic production capacity of steel up to 300 MT per year by 2030 and the consumption of 160 kg per capita.
• The GOI also promoted the defense, railway, transport, road, and highway sectors to increase of use of domestic steel.
• The GOI approved the PLI (Production Linked Incentive) scheme for the steel industry through which the GOI aimed to attract Rs 400 billion in the Indian metal industry.

Challenges faced by the Metal Industry in India:

• Due to a lack of technology, the labor productivity of India in the metal industry is way less than compared to other countries like Japan and Korea. The labor productivity in India is around 90-100 tons/worker which is 600-700 tons/worker in Korea and Japan.
• India has a huge demand for steel as industrialization is boosting thus a large amount of steel is still being imported from other nations due to higher demand and less supply. 
• India is a developing country and thus making a huge investment in the metal industry is not feasible as per the current economic condition. 
• Factors such as power shortage, raw material shortage, labor strikes, and lack of automatic machines result in decreased steel production in the country.
• The poor quality of steel manufactured due to various factors like unskilled labor, and lack of proper tools, and machines results in creating a dead stock. As the end client doesn’t accept the poor grade material and produced material is to be recycled again to make it usable.

Future outlook of the Metal Industry in India:

India has enough potential, natural resources, and advanced technology needed for steel production, thus the proper government policies and investment via private and foreign investors. It’s quite important to improve the domestic production capacity of the metal industry via new innovations and technology, it will help India soon turn into a major metal industrial hub. Also, it’s quite important to limit the use of exhausting minerals like coal, copper, bauxite, manganese, and lime. Using green energy for power generation in the metal industry is quite important as the natural resources are depleting. Thus the GOI is also promoting the use of solar energy, wind energy, and hydro energy for power generation.