Any discourse on the world economy is incomplete today without any reference to China, because its might in manufacturing makes the world look up to its second largest economy for inspiration and innovation. China produces 10 times more steel than India does. Its percapita consumption is almost eight times higher than ours. The nation mostly uses steel to feed its urbanization programme that calls for rapid development of modern buildings, infrastructure and housing, airports and metros, and many other areas that warrant durable and speedier construction.
Thanks to its unbridled population growth, India is within the striking distance of dislodging China to become the world’s most populace nation. According to the United Nations, India is expected to add around 237 million between 2019 and 2050 to its current tally of 1.37 billion. In China, 58.55% people live in urban areas; in India, this is just 34%. Yet, our cities are already over-crowded. Our land area is inadequate – only one-third that of China! This calls for a rapid spate of urbanization, much quicker than the rest of the world and at an affordable cost, not just to accommodate the growing population, but also for the meteoric rise in people’s aspiration for a better and a cleaner place to live in .
Steel is at the centre of urbanization, because it allows designers and architects to have flexibility despite its inherent strength, durability, flexibility and elasticity. India has started using steel to build durable, sustainable, fire-resistant, easy-to-repair houses, warehouses and skyscrapers; and spruce up its beleaguered infrastructure in areas like bridges, flyovers, highways, airports, sea ports and public utilities; but, the quantity is far less than what it should have been. However, it is only a matter of time for the usage grows rapidly, as steel saves time and money. Its aesthetic property and complete recyclability allow steel an improved environmental performance across the lifecycle of the structure.
Globally, residential sector accounts for around 40% of the total structural steel consumption, followed by infrastructure, commercial sectors and others including public utility. Of the various types of steel used in the infrastructure and construction sectors, growth potential is the highest for structural steel in India. The usage is at its nascent stage now – just 4.4% of the total consumption, compared with the global average of 9% and 11% in Europe, and 8% in Japan and the Middle East. The share is projected to go up to 10% of the total consumption in 2023 and even higher in 2030.
Traditionally, India has been a supplydriven market for steel; however, the consumption growth for structural steel is most likely to be demand-driven. The demand for traditional and expensive structural steel will make way for an improved version – structural tubes! The future demand for such cost-effective, lightweight and tailor-made structural tubes will only grow as different studies have pointed out. Structural tubes can be a convenient and cost-effective substitute to each and every construction being built using structural steels. The usage of structural steel tubes will make the world a far better place to live in.
The market for hollow structural tubes/ pipes has remained largely untapped in India. However, coupled with the drastic improvement in the aspiration of its people and their living standards, India’s exponential population growth is slated to open a huge opportunity for the application of the vibrant variant. Structural pipes, available in varied shapes and sizes, will be a better and a durable solution to PVC pipes used in homes and wood planks used in truck bodies. Door frames, bridges and foot-overbridges can be erected using structural pipes/tubes. There are many such areas, including in public utilities, where structural pipes/tubes can be prudently used.
The National Steel Policy, unveiled in 2017, pegged India’s steel demand to grow between 212 MT and 247 MT by 2030-31; and consumption by infrastructure and construction sectors to nearly quadruple to 135 MT from around 33 MT in 2015- 16. Within the infrastructure space, the prospect of growth was estimated to be the highest, nearly 10-fold, to 90 MT in areas like oil refinery, highways & bridges, airports, seaports, urban infrastructure, water transportation and sanitation, industrial sheds and prefabricated buildings. Use of steel in the construction of real estate comprising residential, institutional, commercial and industrial was estimated to nearly double at 45 MT.
Quality products will be of the utmost importance as India aims for strong and durable construction. The industry needs to gear up and come up with such products to meet the rising demand. World-class, cost-competitive and tailor-made products must be delivered at the doorstep of the customers. Capacity augmentation is also the need of the hour.
The government has been supportive to the cause of the steel industry for long and its recent decision to pull out of the Regional Comprehensive Economic Partnership (RCEP) accord is enough to assume the fact that the support will continue. The government’s policy to provide preference to domestically manufactured iron & steel products (DMI&SP) in government procurement has given enough cushions to domestic manufactures to cash in on the unfolding infrastructure story of the country. The government has also omitted a massive Rs 100 lakh crore investment towards development of country’s infrastructure over a period of five years till 2024-25.
Time is ripe for banks to come forward and support the industry with funds for enhancing capacity. A robust insolvency resolution mechanism has already been put in place to put a brake on rising nonperforming asset level of the banking system. Banks should awake from their deep slumber.
Lastly, as the great French novelist Victor Marie Hugo said, “Nothing is more powerful than an idea whose time has come”; India’s time to create a lasting and indelible impression of a responsible nation committed for the overall development of the global world has come and we only have to make sure that our beloved India does not miss the bus once again. Our future generations deserve a far better place to live in!
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