IRON AND STEEL INDUSTRY



Published on 18 Feb 2025

India has emerged as a global steel powerhouse, ranking as the world's second-largest producer. With annual output exceeding 120 million tonnes and its pivotal role in key sectors, steel is a cornerstone of India's economy

Growth and development of the Industry

  • Indians are known for the art of smelting iron in early times e.g. Mehrauli pillar.

  • The real beginning of Iron and steel industry was in 1907 with setting up of TISCO plant at Jamshedpur. It was set up in the confluence of Subarnarekha and Kharkai rivers in 1907. 

  • After Independence, during second Five Year Plan (FYP) that three integrated projects were started at Bhilai (with erstwhile USSR technical and financial support), Rourkela (with Germany assistance) and Durgapur (with U.K assistance)

  • Steel Authority of India (SAIL) Established in 1973, SAIL is a government undertaking and is responsible for the management of steel plants as Bhilai, Durgapur, Rourkela, Bokaro

  • The economic liberalization of 1991 opened the doors for private sector investment in the iron and steel industry. A key focus of this phase was modernization and technology upgradation.

  • Today, India boasts a robust iron and steel industry, ranking as world's second-largest producer of crude steel, only behind China.


Locational Factors of Iron and steel Industry

  •  Proximity to Raw Materials: Bulky and weight-losing raw materials (iron ore and coal) necessitate plants to be situated close to their source.

    • Example: The abundance of iron ore and coal in Jharkhand has made it a major hub for steel production in India.

  • Market Accessibility: To reduce transportation costs associated with bulky steel products, plants often locate near major markets.

    • Example: Tamil Nadu Steel plants cater to nearby automakers, reducing transport costs.

  • Efficient Transportation Infrastructure: Efficient road and rail networks are crucial for the iron and steel industry.

    • Example:  Dedicated Freight Corridors connecting mines & factories in Jharkhand & Odisha to major markets.

  •  Technological Advancements: Advancements like the growing use of scrap steel as a raw material make market-oriented locations more attractive.

  • . Port Access Advantage: Plants near ports benefit from cheaper import of raw materials or export of finished steel. 

    • Example: Proximity to Visakhapatnam port facilitates import of coking coal and export of finished steel.

  • Labor Availability: The iron and steel industry requires adequate and affordable labour. Regions with a suitable workforce, like those in West Bengal, India, offer a location advantage.

Advantages of mini steel plants

  • Cost-Effective: Lower capital requirements for establishment and production compared to large plants.

  • Time-Efficient: Shorter production cycles lead to faster output and market competitiveness.

  • Operational Flexibility: Easier to adapt production based on readily available scrap steel.

  • Decentralized Growth: Established in urban/semi-urban areas, promoting regional development.

  • Local Needs Met: Cater effectively to local demands for construction materials and utensils.

  • Efficient Transportation: Utilize local scrap, reducing reliance on long-distance transportation networks.

  • Low-Cost Steel: Production with scrap and pig iron minimizes processing costs.

  • Compact Infrastructure: Require less infrastructure compared to large-scale steel plants.

iron and steel industry in india

                                                 


Tags:
Geography

Keywords:
IRON AND STEEL INDUSTRY Growth and development of the iron and steel Industry Locational Factors of Iron and steel Industry Advantages of mini steel plants

Syllabus:
General Studies Paper 1

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