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Iron and Steel Industry in India

Introduction: India being a developing country, Iron and Steel Industry has a very important role to play. The manufacture of steel is regarded as one of the key industries. It is a prerequisite for modern industrial development.

Large amounts of iron and steel is required for constructing bridges, rail tracts, railway rolling stock, ships, vehicles, various machines, power plants, airports, etc.

The basic need of Indian economy today is rapid industrialization. As important industries like Railway locomotive, Ship Building, Heavy and Light Machine, Construction, etc. depend on the availability of iron and steel, iron and steel industry accelerates industrialization and is, therefore, called the backbone of all industries.

As on 2013, with crude steel production of 81.2 million metric tons, India is ranked as the fourth largest steel producing country in the world. It is estimated that India would produce 86 million metric tons of steel in 2015.

Raw materials

The raw materials for Iron & Steel Industry includes iron ore, fuels (coal, coke), limestone, dolomite, silica, refractories, manganese, nickel, tungsten, etc. are also used. Recycling of scrap to produce new steel is also very common. These industries also need plenty of water and electricity.

Iron ores are found all over the country. During 2014, India was the fourth largest iron-ore producing country in the world. For the production of one tonne of iron and steel, generally 1.5 tons of iron-ore, 0.45 tons of coke, 0.5 tones of limestone and 0.5 tones of manganese, nickel, dolomite, etc. are required. Besides, nearly 60 tones of water are required.

We have got abundant supply of the raw materials needed for production of steel. Iron ores and ancillary materials like manganese and mica are found in very large quantities in many parts of India, particularly in Jharkhand, Odisha and Chotanagpur. We are equally rich in the supply of coking coal required for steel manufacture.

Conditions for the growth of Iron and Steel Industries

The optimum conditions for the growth of Iron and Steel Industries are mentioned below:

1. Coal and iron-ore are required in large amounts in the production of iron and steel. The industry is, therefore, located either near coal producing areas or iron-ore producing areas.

2. Large amount of water is required to cool the smelt iron, which is heated to very high temperatures with the help of coal. The factories are generally located near rivers or lakes and near coal or iron-ore mines.

Other factors affecting the location of the steel plants are:

  • availability of cheap labor near the steel plant,
  • good communication, market, ports, etc.

Huge amount of capital is required for setting up of iron and steel plant. Though India is rich in coal, iron-ore and cheap labor, but large amount of capital makes it difficult to set up many steel plants.

Growth and Development of Iron and Steel Industry in India

Historic background

The Iron and Steel Industry started in India from ancient times as testified by the iron beam in the Konark Temple in Orissa and the 7 meters high iron pillar near Qutab Minar in Delhi.

In 1779, Motte and Farquhar attempted to set up a modern iron plant in Birbhum in West Bengal. In 1830, Marshall Heath had set up an Iron and Steel plant to produce pig iron with the help of the East India Company in Portonova area of South Arkot in Tamil Nadu. But the factory closed due to the shortage of energy and machines and also Heath’s death.

Growth of Modern Iron and Steel Industries

The iron and steel industry is playing a major role in the growth story of modern India. The Government of India has taken several initiatives for the growth and development of Iron and Steel Industries in India. Several iron and steel plants have been set up in the past 100-150 years.

Barakar Iron Works: Iron and Steel Industries along modern lines started in 1870, at Kulti in West Bengal called the Barakar Iron Works. This Plant was taken over by Bengal Iron and Steel company in 1889. In 1900, Barakar Iron Works produced nearly 35000-40000 tones of pig iron. Finally, the Bengal Iron and Steel was amalgamated with IISCO in 1936.

Tata Steel Limited (Formerly Tata Iron and Steel Company – TISCO): This Iron & Steel Industry really started on August 25, 1907. A Parsi businessman named Jamshedji Tata set up one of the largest Steel Plants in India in Sakchi village in Bihar (now Jharkhand), now called Jamshedpur. Pig iron was produced here in 1911 and steel was produced in 1914.

Tata Steel has a very large productive capacity for finished steel per year. Today, Tata Steel is a multi-national steel maker and has operations in more than 25 countries including India, China, United Kingdom, Singapore, Thailand, etc. In 2007, Tata Steel acquired the UK based steel maker – Corus. Based on 2013 data, Tata Steel is the eleventh largest steel producing company in the world. Its global crude capacity is little over 25 million tonnes.

Steel Authority of India (SAIL): It is the largest public sector steel producing company in India. The majority stake of this company is owned by Government of India. It was founded in 1973. It produces steel, flat and long steel products, steel plates, etc. It has five integrated steel plants, three special sheet plants, and one ferro alloy plant.

Initiatives after Independence

Since independence emphasis was laid on the development of Iron & Steel Industry to bring about rapid industrialization in India. The First Five Year Plan (1951-52 to 1955-56) made no headway in iron & steel production.

In the Second Five Year Plan (1956-57 to 1960-61), the government took initiatives to set up large iron & steel plants were set up at Durgapur in West Bengal, Raurkela in Orissa and Bhilai in Madhya Pradesh. The Third Five Year Plan (1961-62 to1966-67) saw the increase in production in these plants and attempted to set up another plant at Bokaro in Bihar.

The Fifth Five Plan (1974-75 to 1978-79), Sixth Five Year Plan (1980-81 to 1984-85) and Seventh Five Year Plan (1985-86 to 1989-90) laid emphasis on expansion and increase in production of existing steel plants and setting up of small steel plants in different parts  of the country. Large steel plants require large capital to be set up. So in the Eighth (1981-92 to 1996-97) and Ninth (1997-98 to 2002-2003) Five Year Plan emphasis was on setting up mini steel plants and private entrepreneurship was made welcome.

The demand for iron and steel goods and machinery has been steadily increasing.

List of Major Iron and Steel producing companies in India

  1. Tata Steel (ranked 11th in the world in terms of production of steel)
  2. Steel Authority of India (SAIL) – ranked 29th in the world.
  3. JSW Steel Limited – ranked 31 in the world.
  4. Essar Steel
  5. Jindal Steel and Power
  6. Mahindra Ugine Steel

List of major Iron and Steel units of SAIL:

  • Indian Iron & Steel Company Limited (IISCO steel plant)
  • Bhilai Steel Plant
  • Rourkela Steel Plant
  • Bokaro Steel Plant
  • Durgapur Steel Plant

Types of existing Iron & Steel Plants in India

There are three types of Iron and Steel Plants in India:

1. Integrated Iron and Steel Plants like in Bhilai, Bokaro, Jamshedpur, Rourkela, Vishakhapatnam, Durgapur and Kulti-Burnpur. The plants are called integrated because, in an integrated or cohesive manner there are different factories producing coking coal, blast furnaces producing pig iron, steel ingot, finished steel etc. at the same time.

2. Alloy Steel Plants like in – Bhadravati, Salem and Durgapur. They are located near the Integrated Steel Plants. There are some other steel plants for Defense purposes like the Mixed Metals Corporation at Hyderabad. In the plants along with steel, manganese, nickel, tungsten and other metals are missed to produce alloy steel and other special steels. Japan, Germany, Britain, France, Italy etc. produce thousands of varieties of steel with highly developed technologies, thus their products are of such good quality. Their technological gap with India is great.

3. Small Steel Plants – include Mini Steel Plant and Sponge Iron Plant etc. They are run by Electric Arc Furnace, producing 15 – 20 metric tons of steel. There are over 216 such steel plants but at present only 177 such plants carry on production.

At present in India there are large mumber of Integrated Iron and Steel Plants, and Alloy Steel Plants (producing stainless steel, nickel-steel, chromium-steel, etc.).

Mergers and Acquisitions

In recent years, there has been surge in mergers and acquisitions among Iron and Steel companies. Among Indian corporates, Essar Steel had taken over the assets of Algoma Steel in 2007. In the same year, Tata Steel had acquired the UK Steel maker – Corus.


We have a sufficiently large stock of iron ores of the richest kind. India also possesses the great advantage of having her iron and coalmines in the same area. It offers facilities for easy transport of materials we need for manufacturing purposes. India possess enough technical knowledge, experience, organizational skill, and financial resources. In view of these natural advantages, we may expect a bright future for the steel industry of India.

Suggested Resources:

  1. Sail (wikipedia)
  2. Tata Steel (wikipedia)
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