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"India's iron ore resources and its surplus production are significant strengths that have not been fully leveraged by the steel industry. This strategic advantage, coupled with expected demand growth, makes it an attractive investment destination for global majors," Ernst & Young said.
"However, success has eluded most of them, with little progress on implementation of most greenfield plants. Despite this, India continues to be on the radar of most of the global players for retaining growth," it added.
Global steel majors like South Korean Posco and world's largest steel maker ArcelorMittal could not break much ground with their proposals to set up steel plants in India for over five years now because of issues relating to land acquisition and forest clearances, among others.
"Indian steel sector needs to address its own challenges and opportunities, some of which are unique to the country. While issues around social licences to operate and growing resource nationalism are visible in most developing economies, their impact on the growth of the Indian steel sector is more profound at current times," Ernst & Young said.
The consultancy firm also said despite weak cues from the global economy, India's steel consumption may be better than others in the current year as demand from infrastructure and consumer durables grow.
"Crude steel capacity is also expected to increase in the next two-three years as large expansion projects are commissioned," it said.
India's steel-making capacity now stands at 78 million tonnes per annum.
 Limited.JPG)
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