Strengthening India’s Steel Industry: Addressing Key Challenges

India’s steel industry has grown to become the world’s second-largest producer, a significant achievement. However, to ensure sustainable growth and maintain its competitive edge, the sector must focus on addressing several key challenges. Here’s a look at where India stands on a scale of 1 to 10 across critical areas:

1. Decarbonization
Embracing cleaner technologies like hydrogen-based steelmaking is crucial to cutting emissions and meeting global climate targets. Currently, there’s awareness, but progress has been slow, with much of the action still in the planning stages. I would rate this at 2/10—it’s time to move beyond the drawing board.

2. Raw Material Security
Diversifying coking coal sources and increasing steel scrap recycling for electric arc furnace (EAF) production are essential steps towards sustainability and cost efficiency. While progress has been made in securing coal, domestic scrap recycling infrastructure is still in its infancy. This deserves a 4/10, with room for improvement.

3. Tech Modernization
Adopting Industry 4.0 technologies—such as AI, IoT, and automation—will drive efficiency and improve product quality. Given India’s strong IT capabilities, this should be more achievable, but adoption remains limited. I’d rate this a 3/10—the potential is there, but it hasn’t been fully realized yet.

4. Value-Added Production
Moving up the value chain by producing specialty steels for sectors like automotive, renewable energy, and infrastructure can significantly boost profitability. The Government’s recently launched Production Linked Incentive (PLI) Scheme for Specialty Steel should give this a boost. I would rate this area a 4/10, as there’s a solid start, but much more needs to be done.

5. Domestic Demand
India’s infrastructure initiatives have fueled steel demand, especially with sectors like automotive and construction on the rise. The government’s efforts have been notable, but there’s always more to be done. I’ll rate this a 6/10.

Will add ratings for export competitiveness, logistics and infrastructure, and workforce upskilling and training in a future post. So please stay tuned, and give your thoughts on the ratings. Agree or disagree, we look forward to hearing from you.