Topics: International trade, Steel, Iron ore Pages: 3 (869 words) Published: January 26, 2013
PESTEL Framework:
Government delays in allocating coal blocks for captive consumption by steel manufactures is seriously hurting the competitive edge of Indian steel sector. Delays in allocating iron ore mines as well as approval for mining licenses. No new investment on the ground in the steel sector is happening to add new steel capacities. Delays in land acquisition for greenfield projects. There is thus delay in converting the intent into project on ground especially in the area of expansion and modernisation. This impedes growth of domestic steel capacity creation. The Indian steel sector may face threat from cheap imports, now that the import duties on steel in India are amongst the lowest in the world. Import pressures could consequently lead to pressure on margins of the domestic companies on account of lower steel realisations. However, if the Indian government increases the import duty on steel products, domestic steel industry could get protection to an extent. But since India has already agreed to the WTO norms, it might become difficult for the government to increase duties substantially. Volume growth would be visible in the years to come, largely due to the continuation of infrastructure spending (including housing), strong demand from the auto sector, which could help in driving demand for value added steel products like CR (cold roll) steel and exports CII Report on Steel:

India’s status as a major player in the global steel industry is now well acknowledged. As the second fastest growing producer and consumer of steel, India, along with China, has decisively swung the balance of power in the steel industry towards the emerging world. For India to retain this growth momentum, though, several infrastructural and operational hurdles need to be overcome. The next few years are going to be critical for long-term development of the Indian steel industry.

Overview of Indian Steel Industry
The Indian steel industry is at the cusp of a sustained...
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