How is steel the backbone of India’s growth plans?

Industrial growth is often directly correlated with the performance of the steel sector of any economy. India is regarded as one of the rapidly growing steel producers around the globe. The significant growth of the Indian steel sector has been largely supported by the abundance of resources available in India, such as cost-effective labor and iron ore. This steel industry also largely contributes to the Indian manufacturing sector.

In order to keep up with modernization, the Indian steel industry acquires state-of-the-art technology for its steel mills. This aids in quick upgradations of old plants, thus resulting in higher efficiency levels. International investment in the mining and metallurgy sectors of India have also played a pivotal role in aiding the fast-paced growth of the Indian steel industry.

Global developments are shaping the Indian steel landscape positively. The success of the steel industry has largely been supported by the following factors:

• Growth and development of infrastructure and logistics: India is considered to be one of the fastest developing economies in Asia. With such fast-paced growth comes the increasing demand of avant-garde infrastructure and logistics. The construction sector, coupled with the infrastructure sector, plays a significant role in the total steel production within the country. The transportation needs of India are also expected to rise for supporting the growing population of the country. Other than these, increasing urbanization coupled with the growth of household income also largely caters to the increase in building new infrastructure. Therefore, the steel industry directly caters to construction and development of the increasing modernization and reliable infrastructure and logistics for the economy.
• Support of the regulatory framework and government: The regulatory body of any economy acts as the backbone of its production sectors through its constant and unwavering support both during economic progression as well as in times of crisis. The Indian government has been providing consistent support to the steel industry over the years. Recent enforcements by the regulatory bodies regarding earthquake resistance and strengthens of buildings have further been in favor of an increment in steel production, thereby facilitating an unstoppable growth of the sector.
• Competitive local raw material pricing: India’s steel sector, particularly mining and metallurgy, has obtained raw material security at competitive prices which have safeguarded the sector’s growth for a long time.

In the recent years, the sector has faced some critical challenges, such as cheap imported raw material coming into the country, and the trial to bridge the gap between the local demand and supply of skilled labor in the steel industry. However, with the prevailing supports from the government and positive economic conditions, the Indian steel industry continues to flourish amongst others. Given the volatility and uncertainty in the global business environment coming from internal as well as external forces, Indian steelmakers will continuously need to pull their socks up to grow competitively in the industry.

Originally published at www.ofbusiness.com.