India’s steel manufacturing sector is playing a key role in the country’s economic and industrial growth. As per the newly introduced tariff barriers in the global market, India aims to reduce import dependency and emerge as a global leader in steel production. Our ambitious ‘Make in India’ initiative, launched in 2024, is already encouraging manufacturing powerhouses, both international and domestic companies, to produce their goods within the country.

As India aims to break barriers and emerge as a self-reliant force in steel, the industry is set to scale up production capacity to 300 MT by 2030–31, potentially exceeding 330 MT, while making significant investments in green steel. Let’s delve into how the ‘Make in India’ initiative is driving this transformation, enhancing capacities, and positioning India as a competitive player in the global steel market.

The ‘Make In India’ Initiative & The Steel Industry

The ‘Make in India’ initiative focuses on enhancing the manufacturing sector’s contribution to the GDP, aiming to increase it from 16-17% to 25%. The steel industry is crucial in this context, as steel is fundamental to infrastructure, construction, automotive, and various other sectors. India’s status as the second-largest producer of crude steel globally underscores the industry’s importance.

To support domestic manufacturing and reduce dependency on imports, the Indian government has implemented several measures. For instance, a temporary 12% safeguard duty on certain steel products was proposed to protect the local steel sector from an influx of cheaper imports, primarily from countries like China, South Korea, and Japan. This move aims to prevent serious injury to the domestic industry and promote self-reliance.

Challenges And Opportunities

Despite these efforts, the journey towards self-reliance in steel manufacturing has encountered challenges. The production-linked incentive (PLI) scheme introduced in 2020 with a budget of $23 billion to boost domestic manufacturing fell short of expectations. By October 2024, only $1.73 billion of the allocated funds had been disbursed, with companies producing just 37% of the initially targeted goods. Consequently, the manufacturing sector’s share in the economy declined from 15.4% to 14.3%.

However, these challenges present opportunities for introspection and recalibration. The lapse of the PLI scheme opens avenues for alternative support methods, such as reimbursing investment for setting up plants. Additionally, the government’s consideration of easing investment rules for firms with up to 10%. Chinese ownership and setting up a post-investment monitoring system indicate a pragmatic approach to integrating with global supply chains.

Shyam Metalics: A Beacon Of Growth & Innovation

Amid these industry dynamics, Shyam Metalics has emerged as a significant player contributing to India’s self-reliance in steel manufacturing. The company operates seven manufacturing plants across India, with an aggregate installed metal capacity of 15.13 MT per annum as of December 31, 2024. These plants also include captive power plants with a combined capacity of 376 MW, underscoring the company’s commitment to sustainable and efficient operations.

In its pursuit of growth, Shyam Metalics has outlined a comprehensive expansion plan.

Capacity expansion:

Shyam Metalics is set to invest approximately INR 650–750 crores in its upcoming expansion, with plans to commission the project by mid-FY 2026–27.  This initiative is expected to generate around 1,500 new job opportunities, reinforcing the company’s commitment to innovation, long-term growth, and India’s industrial and economic development.

Diversification:

Venturing into the aluminium and stainless-steel segments, Shyam Metalics aims to broaden its product portfolio. The company plans to increase aluminium production from 24,000 MT annually to 42,000 MT per year and expand its total annual capacity in value-added products from 2 MT to 3.56 MT.

Sustainable practices:

Shyam Metalics prioritises sustainability by sourcing 80% of its power from captive power plants, ensuring cost efficiency. Additionally, the newly introduced Coke Oven plant at Jamuria, West Bengal, produces smokeless fuel by converting coal into coke, significantly reducing carbon emissions and strengthening the company’s competitive edge in the industry.

These strategies align with the ‘Make in India’ vision by enhancing domestic production capabilities, reducing import dependency, and positioning India as a global manufacturing hub.

The Road Ahead

The path to self-reliance in steel manufacturing is set up with both challenges and opportunities. While policy initiatives like the PLI scheme have faced hurdles, they provide valuable lessons for future strategies. At Shyam Metalics, we exemplify the potential for growth through strategic investments, diversification, and sustainable practices.

Final Thought 

As India continues its journey towards becoming a global manufacturing leader, the steel industry’s role remains pivotal. By empowering innovation, supporting domestic enterprises, and integrating with global supply chains, India can achieve its vision of self-reliance and economic prosperity.

FAQs

1. What is the ‘Make in India’ initiative?

   ‘Make in India’ is a national programme launched in 2014 to transform India into a global manufacturing hub by encouraging companies to produce their goods within the country.

2. Why is the steel industry important for ‘Make in India’?

   The steel industry is fundamental to various sectors like infrastructure, construction, and automotive, making it crucial for industrial development and the success of the ‘Make in India’ initiative.

3. What challenges has the Indian steel industry faced recently?

   The Production-Linked Incentive (PLI) scheme aimed at boosting manufacturing fell short of expectations, with only $1.73 billion disbursed out of $23 billion, leading to a decline in the manufacturing sector’s share in the economy.

4. How is Shyam Metalics contributing to India’s steel industry?

   Shyam Metalics is expanding its production capacities, diversifying into aluminium and stainless steel, and implementing sustainable practices, aligning with the ‘Make in India’ vision.