Iron and steel industry forms the base of all other industries; therefore it is called basic industry. It is one of the most complex and capital intensive industry.
Emphasis on basic and heavy industries was placed with the adoption of Mahalanobis model in the secod FYP.
Factors influencing the locations of Iron and steel industries:
- Raw material: Mostly large integrated steel plants are located close to source of raw materials, as they use large quantity of heavy and weight losing raw materials. Eg: Concentration of Iron and steel industry in Chota Nagpur region-Presence of Iron ore in this region. TISCO at Jamshedpur.
- Markets: As its heavy & bulky transportation cost is high. Therefore nearness to market is important especially for mini steel plants access to nearby markets is most important in order to minimize transportation cost. Also as mini steel plants rely on scrap metal they are mostly present in Maharashtra. Visakhapatnam steel plant located near the coast has excellent import-export facility
- Labour: Availability of cheap labour is also important. Eg: Rourkhela plant, Orisa; Bhilai steel plant in Chattisgarh, mostly in Chota Nagpur region
- Availability of electricity mostly hydro and water for cooling. Eg: Bokaro steel plant on banks of river Damodar, Visheshwarya steel plant, Kar near river Bhadra.
Dumping has affected India’s domestic steel industry:
- Low priced steel imports have been drastically increased in the recent past which has taken a toll on Indian steel industry
- Domestic steel companies are reeling under losses and even large firms have seen squeezing profitability. Eg: SAIL, Essar Steel complained the same
- It has also affected the banking industry as they account for big chunk of bad loans
- Lead to deterioration of performance of domestic industry
Steps taken by govt to tackle it:
- Imposition of anti dumping duty (5.3%-57%): Recently govt imposed five yr anti-dumping duties on stainless steel imports from China, EU, USA, South Africa etc
- Import tax: Import tax on few steel products have been imposed to contain losses of Indian steel companies. Safeguard duty on sheets of steel alloy was imposed recently.
- Govt in talks at WTO to increase freedom to raise tariffs to deal with import surges.
Iron & steel being basic industry provide raw materials for other industries, in order to avoid the spiraling effect and ensure fair trade, provide level playing field to domestic industry govt has taken steps to make big the Make in India initiative.
