The Iron and Steel Industry is a major industry in India. This industry drives the industrial progress of the country. It is one of the key industries in India, and several small- and medium-scale industries depend on it. The transport and communication industry is dependent on it and so is the power and fuel industry. After 2005, the Indian steel industry has come a long way. It is now the fifth-largest producer globally. The production amounts to 55 million tonnes a year and these accounts for over 7% of the global production. SAIL (Steel Authority of India) has surpassed steel majors like Arcelor Mittal and others in profits reported in 2009. From the total production of 200 MT, 50% of it is exported. Exports for iron ore have increased by 17% due to demand from China. Also, with the reduction in the export duty on iron ore from 15% to just 5%, this has given this sector a further boost. Furthermore, reduction in the freight rates of railways has only proved to be beneficial. Many steel companies have come up with investment proposals in this sector. Due to the growing demand in the domestic market and also globally, this industry is set to receive more funds. Per the Investment Commission, India is to receive US$ 30 billion over the coming 5 years. Another factor driving investments in this industry is the availability of raw materials. Due to the fall in the prices of the commodities internationally, the government has reduced the custom duty. It also grants full exemption on some agricultural and industrial commodities. Products, such as pig iron, semi-finished products, and flat products, are now eligible for a basic duty of 5%. The government also plans to put forth US$ 350 billion for construction and improved infrastructure, which will add to the potential of this sector. As the demand for steel is expected to grow in conventional areas, such as construction, automotive, housing, steel tubes, pipes, and packaging, this sector offers good prospects. Specialized steel will be in demand in hi-tech engineering industries. These industries include power generation, fertilizers, and the petrochemical industry. The Union Budget has hiked the allocation for development of highways and the budget allocated for railways. This further increases the need for iron and steel. There is also huge demand in the oil and gas sector. The profits that can be gained in this sector are about $US 118 billion in the coming 5 years. Also, due to the global demand for steel tubes and pipes, this sector holds viability. With growth in the aviation sector and rail transport, the demand for stainless steel is going to rise further. Yet another plus is that the government has withdrawn 10% on the exports of steel products. According to a study by ICICI, the Indian iron and steel industry is likely to meet 19% of the global demand in the coming years. Thus, this sector offers tremendous growth prospects in the time to come.
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