To develop Sponge Iron Industry as National Advantage for India based on Porter's Model

Essay by atulsterUniversity, Master'sB, July 2004

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Steel Industry in India - a National Advantage?

By: Atul Prakash, Final Year MBM (IIT Kharagpur), B.Tech (Metallurgy)(NITW)

It has been often mentioned that a nation's development can be gauged from the condition of the Steel Industry in that country. This is so because it makes significant contribution towards the development in terms of infrastructure, employment etc. The Government of India has a Steel Ministry to look into the matters related to this industry. The sector is so important that it needs to be nurtured and grown in order to generate a National Advantage.

We need to analyze the industry with the perspective that it can bloom into a source of advantage for the nation as a whole. So for this purpose we first have to identify the ingredients which would lead to a national comparative advantage. These ingredients have been listed down with the perspective of steel industry:

1. The availability of resources and skills: India has got abundant resources of Iron ore in the eastern part of the country. But it is lacking in the quantity of metallurgical grade coking coal. It has been reported that India will have to import all its coking coal requirements by the year 2025, which is of utmost importance in most of the large steel plants which have a blast furnace. Hence, there will be a heavy toll on the foreign exchange and also on the cost of production of all the integrated steel plants. As a result, a strong need for an alternative route is required to sustain the development of the nation. We always hear about the use of renewable sources of energy in our day to day activities, but the real savings will be achieved only if the industrial usage of the non-renewable resources is decreased. This is not...