The steel industry has been one of the bulwarks of India’s rapid infrastructure development. And with the Indian government targeting a $5 trillion economy by fiscal 2025, this is one industry whose fortunes look bright indeed, despite the recent turbulence due to the Covid-19 pandemic.

From a mere 22 million tonne in 1992, the industry has ramped up capacity to 142 million tonne in 2020, earning India the distinction of being the second-largest steel producer in the world.

And though the industry’s contribution to India’s gross domestic product stands at a mere ~2%, its multifarious application makes the metal a bellwether of economic activity.

The industry is also an employment generator, employing ~5 lakh people directly and ~20 lakh people indirectly, as per the National Steel Policy 2017.

As the country transitions into an economic powerhouse, steel demand is poised to log a compound annual growth rate (CAGR) of 7-7.5% between fiscals 2022 and 2025. A large part of this growth will be spurred by the government’s Rs 111 lakh crore National Infrastructure Pipeline initiative through fiscal 2025. Here, the government’s initiatives on housing (Housing for All), roads (Bharatmala), ports (Sagarmala), railways (dedicated freight corridors, metros, and bullet train), and airports (Udaan) will provide impetus.

For the record, the share of building and infrastructure construction in overall steel consumption is 60-65% today.

Apart from the opportunity from these major end-use segments, rising application of steel and new trends also present opportunities. Mandatory road crash barriers on national highways, rising concretisation, use of pre-engineered buildings, design changes in urban housing (underground parking and bigger span) – all augur well for steel demand in the long term.