One of the defining features of the global steel industry is its tendency to build excess capacity. Not so when it comes to the Indian steel industry. As it is well known, China and India both began at the same level when India won Independence. But now, the dragon nation has leapfrogged us and gone so far ahead that comparisons sound ridiculous. In the last 6 years, China added a whopping 300 m tonnes when we added a mere 20 m tonnes. Not that India cannot make up for lost time. After all, we are blessed with abundant raw material, especially in the Eastern part of the country. The problem is delays over land acquisition and mineral rights. More transparency and professionalism could help overcome that.
In fact, there are several 10 to 12 m tonnes capacity Greenfield ventures lined up. Investors have rushed in to sign as many as 222 memoranda of understanding for building 276 m tonnes of new steel capacity. Not that all of them are willing or able. But the serious players have hung around despite the recent financial crisis. ArcelorMittal and Posco are still keen on India. And so are Tata Steel, JSW, JSPL and Essar. Little wonder then that the steel minister believes that India can become the second largest steel producer in the world by 2015, next only to China. But it is high time the government started helping these players and stopped dragging its feet.
Source: The 5 Minute Wrapup, March 3, 2010
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