Since the post independence era, the iron and steel industry in India, has seen a steady growth. The economy has seen an escalating demand for these goods. In the early 1990’s, a number of economic reforms were introduced by the Indian government. These reforms acted as catalysts in the success of the iron and steel industry.
The 1991 reforms stated that no licenses would be required for capacity creation, except for some locations. In addition, once India’s steel industry was shifted from the listing of the industries that were reserved exclusively for the public sector, huge foreign investments started pouring in into this industry.
The year after that saw yet another reform. In 1992, all the control over the pricing and distribution system was removed; this made the modern Indian Steel Industry extremely efficient, as well as competitive.
Government measures such as, unrestricted external trade, low import duties, easy tax structure as well as other external reasons like technological assistance and foreign investments were the key reasons behind the success of the steel and iron industry.
Today the Indian steel industry has seen an average growth rate of more than 10% CAGR in output in the last five years. The iron industry has seen a considerable rise too. The key growth drivers for the steel and iron industry are the 12% growth in construction. The steady growth of the Automobile, Auto components, Infrastructure, Consumer Durables and Oil & Gas Industry has worked as the major drivers behind the demand for Iron and Steel in India.
The robust growth of these sectors directly impacts the growth of the Iron and Steel Industry in India. There’s a chain reaction between the demands of each of these products.
