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75 YEARS OF INDIA’S INDEPENDENCE: HOW THE METAL MANUFACTURING INDUSTRY HAS CHANGED?

Historically, metal industry has played a critical and major role in not only driving industrialization but also in achieving economic progress. History has shown that nations with sound metal industries have always benefitted from a first-mover advantage. This was proved at the start of the twentieth century when the economies of nations were driven by industrialization.

Post-independence, Indian leaders were wise enough to realize that if India was to attain sustained economic growth, one of the sectors that is going to play a key role will be the metal manufacturing industry. To achieve this goal, they recognized it’s important to develop primary sources like raw materials; secondary sources like manufacturing; and tertiary sources like the services, as metals, primarily steel, was the common facilitator between the three sources.

In the 1990s, metal manufacturing sector underwent massive changes after decades of stagnation and low growth. 1990s saw the onset of liberalization and open market policies which brought in new forms and sources of investments, technologies, techniques, and practices. This helped to dramatically improve the production processes which in turn helped enhance the output of the metal manufacturing industry and the quality of its products.

In the 21st century, India became a major economy, with the metal manufacturing industry contributing immensely to the country’s growth. Today, India produces 87 types of metals which include 3 atomic, 4 fuel, 10 metallic, 47 non-metallic, and 23 minor minerals. The country has a booming metals manufacturing industry and is also home to huge deposits of natural resources with several metals like bauxite, chromite, copper, gold, iron ore, and manganese.

TOP METAL MANUFACTURING INDUSTRIES

India is home to several metal manufacturing industries.

But there are four metal manufacturing industries that stand apart for the sheer reason they contribute the most to India’s economic growth.

STEEL METAL INDUSTRY

India achieved a historic feat in 2019 when it displaced Japan to become the world’s second largest crude steel producer, behind China. At 111.2 MT, India’s steel metal industry contributes directly around 2% of the country’s GDP, with the indirect contribution much higher

Over the years, several Indian Governments took credible steps to improve the steel metal manufacturing sector. As a result of this, the production and supply chain processes improved, helping create several quality jobs that provided direct and indirect employment to lakhs of Indians.

Recognizing the immense opportunities that come with the steel metal manufacturing industry, the Ministry Of Steel has initiated more proactive measures with the aim to elevate the steel production capacity to 300 MT by 2030-31.

COPPER INDUSTRY

Compared to steel, India unfortunately lags behind in copper industry. As a result of this, the copper metal industry (the global copper output is mainly driven by China) has not been able to fully achieve its real potential despite the fact that it exports a lot of copper. Experts attribute this to the fact that India significantly imports large amounts of copper into the country.

Other reasons include usage of outdated manufacturing technologies, insufficient infrastructure, high funding and high setup costs, and lack of sufficient skilled professionals.

ALUMINUM INDUSTRY

Aluminum is the fastest growing metal in non-ferrous metal category, in the world today. Much sought after by many industries like automobile, etc, what makes aluminum so good and valuable is its dampness, formability, resistance to corrosion, and weight-ratio.

When compared to the early years after independence, India has improved its position in the global market. During the period 2011-12 to 2016-17, India became a net exporter of aluminum from a net importer, with a CAGR of 30 percent.

ZINC INDUSTRY

The fourth most widely used metal globally after steel, aluminum, and copper, zinc industry in India is still evolving. As a result of this, the zinc metal industry has lagged behind its global counterparts. Like most metals that it dominates, China dominates in the zinc metal sector as well and accounts for 33.8 percent of the total world production

One of the factors as to why India does not fare that well in the zinc metal sector is demand for zinc in India is predominantly driven by the steel market with 70 percent dependent on steel. Zinc is used in the galvanization and coating of iron and steel which ensures its protection from corrosion.

GOVERNMENT POLICIES

Several Indian Governments over the years since independence have played their roles in helping the metal manufacturing to grow and flourish.

The present Government of India has initiated several policy initiatives to strengthen the metal manufacturing industry and boost its performance

Some important measures that it has initiated include:

  • Opening-up of 13 minerals that were earlier solely reserved for the public sector, to the private sector. These include copper, chrome ore, diamond, gold, iron ore, manganese ore, molybdenum, nickel, platinum, sulphur, tungsten, and zinc.
  • Enabling foreign equity holding up to 100 percent through automatic route for all non-atomic and non-fuel metals except diamond and precious stones.
  • Reduction of customs duty on primary and secondary metals to 10 percent from 15 percent.
  • Initiation of the National Steel Policy (NSP) with emphasis on improving cost, efficiency, production, product mix, and quality, thereby accelerating growth in the domestic production and consumption of steel.
  • Reduction of duties on different categories of steel products to 10 percent from 15 percent.
  • Reduction of customs duty on alloy and stainless steel to five percent.
  • Reduction of duty on nickel to two percent from five percent. This has been initiated to help domestic stainless steel sector to withstand increase in global prices for raw materials.
  • Reduction of duties on copper and copper products. Like for instance customs duty to 10 percent from 35 percent.
  • Import of copper and copper products from Sri Lanka at zero duty under the FTA (Free Trade Agreement) pact.

Overall since independence, metal manufacturing industry has become competitive with several attractive growth opportunities waiting to be harnessed.

CONCLUSION

After 75 years of independence, metal manufacturing industry in India has achieved several credible landmarks despite several bottlenecks and challenges along the way.

With sound support from the Government of India in the form of improved infrastructure and stimulus packages, the metal manufacturing industry is well on track to grow, prosper, and thrive in the years to come.