With steel accounting for about 2 per cent of India's GDP and 16 per cent of its industrial share, a healthy steel sector is vital for the Indian economy, particularly for manufacturing and construction.
The findings of National Council of Applied Economic Research study suggest that the steel sector in India has a very high potential. While the steel industry in other major economies is aging, with little prospect of high growth, India's steel industry is young.
While many old steel producers are struggling with the difficult task of retrofitting, India as a late-comer has the advantage of leapfrogging to the latest technology that is efficient and environmentally friendly. If India's economic growth accelerates, the production of steel should increase by several hundred million tons over the next few decades.
NCAER study also finds that the enthusiasm about Make in India appears to be bypassing the steel industry. The current condition of the Indian steel industry is dismal, with low profits, low capacity utilization and dim prospects for new private investment, either foreign or domestic.