The first steel plant was set up by Iron Work Company at Kulti in 1870. However, large scale production got underway only when the Tata Iron and Steel Company (TISCO) was set up at Jamshedpur in 1907. The Indian Iron and Steel Company (IISCO) was set up at Burnpur in 1919. The first unit in the public sector, now known as Visveswaraya Iron & Steel Limited (VISL) began production at Bhadravati in 1923. After Independence, three integrated steel plants were set up in the public sector at Bhilai, Durgapur and Rourkela with one million tonne capacity. Later two more public sector integrated steel plants came up at Bokaro and Visakhapatnam and several steel units in the private sector.

    The public sector Steel Authority of India (SAIL) with five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and Burnpur (run by IISCO, the subsidiary of SAIL) is the largest producer of steel in India and eleventh largest in the world. SAIL has four Alloy Steel and Ferro-alloys units at Durgapur, Salem, Chandrapur (run by SAIL subsidiary Maharashtra Electrosmelt Ltd.) and Bhadravati (run by SAIL subsidiary Visveswaraya Iron & Steel Limited). Together with Visakhapatnam Steel Plant of Rashtriya Ispat Nigam Limited (RINL) another public sector company, the public sector accounts for a major portion of the total production. The balance is produced by the private sector, mainly by TISCO, the oldest steel plant in the country. The private sector, which was producing 7.4 million tonnes of finished steel with market share of 51.4 per cent in 1991-92 has been at present playing a major role in steel production. The steel production in public and private sectors during the years 1991-92 to 1999-2000 is given below:-

(Figures in bracket indicate % share)

    Even before the economic liberalisation of the 1990s, a few sectors of the Iron and Steel Industry were liberalised. Sponge iron was delicensed in the mid-80s; as a result, this sector today ranks only second to Mexico in production. Similarly, the pig iron industry was delicensed and opened to private sector, to meet the shortage of this vital product for the foundry and the mini-blast furnace units.

    The major impetus for growth in this sector came with the economic liberalisation of 1991. The industry was delicensed and opened for private participation; price and distribution controls were removed; "iron and steel" was placed in the high priority list for automatic approval of Foreign Direct Investment; and Import-Export procedures were streamlined. Nineteen major steel plants have been sanctioned in the private sector, involving an investment of about Rs.300 billion and capacity generation of 13 million tonnes. Several of these projects have already come up, while the others are in various stages of completion. These include Jindal Vijayanagar Steel, Essar Steel Ltd, Lloyds Steel Ltd, Jindal Strips Ltd, Prakash Industries Ltd, Ispat Industries Ltd and Southern Iron & Steel Co. Ltd.

    The fast changing world steel scenario has opened up new opportunities and challenges for India. Out of the total world crude steel production of over 790 million tonnes, about 50 per cent is produced in the developing countries. While production in the Western countries had reached a plateau, the emerging demand would boost further production in the developing world. The Indian Steel Industry has competitive advantages, like abundance of raw materials, highly skilled technical manpower and cheap labour.

    India has some of the world’s richest deposits of iron ore. The recoverable reserves of Hematite in India are 10053 million tonnes and Iron ore magnetite 3408 million tonnes. In 1998-99, 70.68 million tonnes iron ore was produced.

(in million tonnes)

Raw Material Reserve Production Export

Iron Ore 10053 7068 31.02

    The existing Export & Import (EXIM) Policy (1997-2002) permits direct exports of iron ore from Goa and Redi sector to all destinations by the iron ore producers, irrespective of the iron content. The KIOCL is the canalising agency for its own products (iron ore concentrates and iron ore pellets) since it is a 100% EOU. Iron ore of Fe content upto 64% is completely decanalised. Exports of ore with iron content exceeding 64% from other sectors of the country are canalised through MMTC. The major buyers of Indian Iron Ore are the Japanese Steel Mills (JSMs).

    India is the fourth largest exporter of iron ore in the world, after Brazil, Australia and Russia. Through the combined efforts of public sector enterprises – the National Mineral Development Corporation Limited and Kudremukh Iron Ore Company Limited and the private miners of Goa, Hospet, Paradip, etc., iron ore exports have increased from 22 million tonnes in 1983-84 to 30 million tonnes in 1997-98.

    Government has set up the Steel Exporters’ Forum as an interactive body of major exporters of steel and various Ministries, to promote exports. Exports of iron and steel products touched an all time high of 3.4 million tonnes in 1997-98 fetching foreign exchange of over Rs.29.37 billion.

    The pig iron industry profile is constantly undergoing changes, with more mini blast furnace units in the private and secondary sector coming up in the post liberalisation era. Significantly, contribution of secondary sector units has increased from only 8% during 1991-92 to around 60% in 1999-2000. Total production of Pig iron in 1999-2000 was 3.158 million tonnes of which 1.230 million tonnes was produced by the main producers and the balance 1.928 million tonnes by the units in the secondary sector. The secondary sector units are also producing foundry grade pig iron including low sulphur and low phsophorous grades.

    The growth of sponge iron units specifically during the last five years in terms of capacity and production has been substantial. The installed capacity of sponge iron units increased from 1.52 million tonnes per annum in 1990-91 to 6.479 million tonnes per annum in 1999-2000. The production has increased from 0.9 million tonnes in 1990-91 to 5.20 million tonnes in 1999-2000 (prov.).

    In all, there are 188 electric arc furnace based steel units in the country with a total installed capacity of 12.55 million tonnes per annum. These units produced 4.46 million tonne crude steel, in 1999-2000.

    There are 940 Induction furnace based steel units in the country with a total installed capacity of 9.86 million tonnes per annum. These units produced 4.11 million tonnes during the year 1999-2000.

    There are 1192 Re-Rolling units in the country with a total installed capacity of 23.82 million tonnes per annum. These units produced 6.57 million tonnes during the year 1999-2000.