The Indian Government had also taken measures to ensure continued growth in the sector. The National Steel Policy was launched in 2017 with the aim to boost per capita consumption. Up to 100 percent foreign direct investments were also allowed in the steel industry under the automatic route. An export duty of 30 percent was also implemented to ensure enough supply to the domestic market. The country’s total steel exports dropped by approximately 35 percent in fiscal year 2019 as a result of the government initiatives to protect the domestic industry from unfair competition externally. The export volume was projected to reach just over six million metric tons in 2019 as opposed to around ten million metric tons in the previous year.
With increasing global and domestic demands for high-quality steel in the logistics, construction and electronics industries, Indian steel companies like TATA steel, Steel Authority of India (SAIL) and JSW Steel have tremendous opportunities to tap into the market. The state-owned steel making company, SAIL was the country’s largest steel producer in 2019. It recorded a domestic sales value of over 600 billion Indian rupees in the mentioned year. The company had a rich product mix that includes flat steel plates, HR coils, welded pipes, silicon sheets and other products. Export value from SAIL at the end of fiscal year 2019 was almost 30 billion rupees. TATA Steel was the world’s second-most geographically diversified steel producer. More than 90 percent of the company’s revenue came through the steel value chain in 2018.
Outlook for the steel industry, however, was not so promising in the fiscal year 2020. A delay in the auction of mines could impact non-integrated steel players like JSW Steel and merchant miners. The decrease in the production capacity of iron ore at close to 60 million metric tons would presumably trigger an increase in imports. About 290 licenses of merchant mines will expire by the end of March 2020. Presently, 60 of those mines are under operation. The steel demand, nonetheless, was likely to go up. Rapid urbanization of the rural areas and the industrial requirements were forecast to amount to approximately 1.3 billion metric tons of steel demand in 2020.