The first big push to the industry was given during the Second Five year Plan (1956 to 1961). Large endowments of iron ore and coal also strongly influenced the investment decisions of early planners. Moreover, to further the ideals of economic socialism, fresh capacity was created in the public sector.

A high degree of state involvement was envisaged to shape this industry in view of heavy investment requirements and long gestation periods. During the fifties and sixties, steel industry grew rapidly at the behest of the public sector integrated plants, when capacity and production increased at the rate of 6% and 7.5% per annum, respectively.

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However from the 70’s onwards, creation of fresh capacities in the reserved integrated sector almost came to a halt, and during this period, primary steel making in small-sized electric arc furnaces gained importance. These small-scale privately-owned electric arc and induction melting furnaces stepped in to bridge the demand supply gap.

From the late 1980s, it was increasingly felt that the regulatory policy framework needed a complete overhaul because price regulation for the integrated producers had stilled generation of internal resources and discouraged inflow of capital into this sector.

Secondly, licensing of capacities, insulation from import competition and de facto price support mechanism for all producers had undermined the productive efficiency. Apart from these adverse supply side developments, this sector also faced constraints arising out of stagnating demand in the domestic market and inadequate export efforts.

Economic liberalisation, which started in 1991, marked the beginning of a new era for the Indian iron and steel sector. This sector, which embodied the central principles of India’s regulatory regime, has been one of the first few sectors to be deregulated.

De-reservation of capacity in the large scale integrated sector was followed by decontrol of price and distribution. The lowering of tariff rates and lifting of quantitative restrictions on imports were also important steps towards liberalisation.

During the post-liberalisation period, the existing large scale integrated producers undertook extensive modernisation. This period also saw the emergence of large scale green field integrated capacities in private sector.

The nineties witnessed the largest decadal expansion in capacity and output of steel sector. Production of finished steel increased from 14.34 million tonnes in 1991-1992 to over 55 million tonnes in 2009-10.

Global integration, however, has not been a blessing for the Indian iron and steel industry as it had to face unmitigated risks and encounter severe marketing problems – resulting in huge inventory and shrinking bottom-line. In the new regime of trade liberalisation, the Indian market has become vulnerable to several destabilizing global forces.

This has been amply demonstrated during the recent downswing in the world steel market, when low priced imports grievously injured the financial health of indigenous producers. Another area of concern is the covert protectionism in the overseas markets especially in the US under the non-tariff barrier of WTO to deny market access to Indian exports of steel.

In the recent past, India’s progress in the export market has been seriously retarded by a number of trade cases brought against it by developed market economies. To maximize the benefits of the opportunities conferred by the new liberalized regime, the Indian steel industry has to be vigilant so that the basic tenets of rule-based trade embodied in the WTO are not flouted by its trading partners.

This, of course, will mean, apart from alertness on the industry’s part, the existence of strong responsive and empowered institutions to act as monitors of the laid down rules.

All this speaks volumes of the need for strengthening our legal framework in arguing our cases on the WTO Forum and convincing other nations of the genuineness of facts in conformity with the WTO norms. Rich nations like the USA often succeed on account of the strong and knowledgeable legal luminaries pressed into service for patents and world trade matters etc.

The Indian industry has, however, come to grips with the rigours of a competitive marketplace. The most notable achievements of the industry in the recent times have been the sustained increase in net exports and a distinct qualitative improvement in the export basket of value-added Hat products.

That the Indian steel industry has been able to withstand the onslaughts of a stagnating world market speaks volumes about its technical maturity, logistical flexibility and, above all, the business acumen acquired and practiced by it.

The ups and downs experienced by the Indian steel industry recently underscore the fact that this industry has entered a period qualitatively different from the earlier ones. The course of the Indian steel industry over the short and medium runs will be conditioned by three crucially important post-deregulation structural developments.

First, global integration of the Indian market as domestic prices get determined, by movements in the international prices; secondly, the latent over-capacity in the world steel industry which implies that global prices and profits will continue to be under constant pressure; and thirdly, the increased predilections of the West to deny market access to emerging exporters by resorting to non-tariff barriers, with the avowed objective of protecting the interest of the U.S. steel producers.

Survival and growth in this environment are determined by the producer ability to stay one step ahead of their competitors through continuous innovation, in technology, manufacturing process and Quality and Reliability criteria, besides making integrated efforts in market development.

The technological revolution in steel making has led to the problems of the new century. Until the 1980s, barriers to entry in the industry were prohibitive. Steel was made through conventional technological processes that were extremely capital-intensive, involved high levels of vertical integration and long gestation periods.

These factors necessarily limited the number of producers, capacity installation and the global supply of steel. Only firms with considerable staying power and deep pockets could attempt to install production facilities.

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