As India works towards becoming a manufacturing powerhouse through policy initiatives like Make in India, the steel industry has emerged as a major focus area given the dependence of a plethora of sectors on its output.
India is currently the world’s second largest producer of steel and is set to become the second largest consumer of steel, with the industry contributing about 2% of the country’s GDP. The industry has the potential to help India regain its positive trade balance in steel as well as to drive the country’s export manufacturing capabilities.
The decline in exports is a concern and calls for efforts from both the public as well as the private sector. There is an urgent need to boost the competitiveness of the country’s steel industry. In order to achieve this, cost reduction across the supply chain, development of efficient logistics and reduction in financing costs are some of the measures required.
A sound credit sector, better investment environment and boost to infrastructure development will go a long way towards strengthening the industry. Steel and metal manufacturing units are considered to be asset intensive.
The steel industry is going through an exciting transformation with the evolution of various emerging technologies such as robots, drones and IoT that provide business with valuable solutions. In addition to automating processes, these technologies connect all units in a plant, allowing them to interact in real time and enhancing the efficiency of the whole system.
Sound asset performance and technology integration will also boost labour productivity. This will help in reducing costs and increasing profitability across the industry. However, the introduction of new technologies will entail the development of a new talent pool with the requisite skills and the upskilling of the existing workforce.
Investment in education and training will be a key enabler in these areas. The digital disruption has just begun and is set to increase exponentially in the next 10 years. The right adoption of the emerging technologies is a critical factor for success in times to come. Though the steel industry in India and the rest of the world is grappling with certain challenges, a push from the government and the adoption of emerging technologies will enable India to become a USD 5 trillion economy in 5 years and to achieve the goals outlined in National Steel Policy.