A competitive steel industry in India, essential for the growth of the basic sector

The steel and mining sectors are of strategic importance for any industrialized nation. India is fortunate to have a solid foundation for both sectors. The industry contributes to the creation of jobs and well-being. Especially among the states rich in minerals, which are undergoing economic and social development.

Raw materials are essential for competitive growth in the steel industry. They support the main sectors, such as infrastructure and production. It is important to keep competitive costs for raw materials, energy, labor, capital and logistics. Because the steel industry depends on all these aspects.

One of the main reasons for the slow growth of steel exports (-6.6% in April-December 2014) from India was that Indian steel cannot compete with the prices offered by other producers on the major markets. It is therefore imperative for the long-term sustainability of the steel industry in the country to keep the cost of purchasing raw materials within controllable limits.

The steel and mining sectors is important for the steel sector

In the mining sector, the government has recently instituted bidding rules for coal blocks. This is a step towards the future that protects the investment of companies in the mining and steel sector. All by establishing links between raw materials, factories and end user companies.

The auction is a mechanism adopted to bring transparency. In the case of coal, preference will be given to bidders with projects located near the mines and based on financial records. Also, development from the past. This is definitely a plan that can be successfully replicated for the iron ore mines of the steel companies. It is necessary to define the norms of added value. And to encourage optimal exploitation activities and to ensure competitive prices in relation to commercial mining.

In all these aspects, the role of a regulatory mechanism is extremely important. The auction can allow the participation of multinational investors whose activities can be put in the interest of the country within a properly regulated mechanism.

A competitive steel industry is also essential to the success of the processing sector. After a stagnation in the last two years. Growth in this sector can be facilitated by guaranteeing the supply of raw materials (steel), at competitive rates.

The Indian steel industry aims to achieve almost 3 times more than the current level of production in the next decade and a half to meet the growing industrial and production demand and become the second largest steel producer in the world. The target can only be achieved if the iron ore and coking coal supply strategy clearly defines a transparent exploitation framework, as far as possible.

Source: http://www.financialexpress.com/article/markets/commodities/competitive-steel-industry-crucial-for-core-sector-growth/29191/