India’s iron and steel industry is the hallmark of its industrial development. The first iron and steel industry in India was set up by TISCO – Tata Iron and Steel Company in Jamshedpur, marking the beginning of a glorious era. Over a century later, the sector has burgeoned, contributing steadily to nation building and national economy. In recent years, the demand for steel in India and worldwide has soared, making India, the 2^nd largest producer of crude steel in the world. Let us take a look at the first steel plant in India and how modern companies continue to propel the industry forward, through innovation and expansion.

Also read: List of the top 10 Indian steel manufacturing companies

First iron and steel industry in India – An overview

Iron and steel are key inputs in infrastructure and manufacturing, and supports numerous industries across automotive, construction, energy among others. India is a global steel producer (nearly 118.20 million tonnes crude steel as of Jan-Dec 2021 – Source: Ministry of Steel). It’s also a major steel exporter and importer, making an important contribution to international trade. We’ll take a more detailed look at the 1st iron and steel industry in India in the sections below.

Also read: Interim Budget 2024 – Incentives for the steel sector, pricing & procurement

Birthplace of Indian steel – Jamshedpur

Nestled in the resource-rich state of Jharkhand, the city of Jamshedpur is strategically located with easy access to essential raw materials like coal, iron ore and manganese – all required for steel production

In a recently published article, we have covered everything about ‘Steel City of India‘. Explore it and share your opinion.

TISCO – the first steel plant in India

TISCO’s journey through Indian history

In 1911, TISCO started the production of pig iron and by 1912 it started steel manufacturing – steel ingots being among the early produces.

In the following years, TISCO came into a joint venture with Burmah Shell to form TCIL. The company today is known as Tata Tinplate with almost 70% market share in the country. (Source: Wikipedia).

The company continued with its expansion plans after independence and by 1958, the plant had the capacity to produce 2 million tonnes per annum.

Economic and Social impact

TISCO’s (modern Tata Steel Limited) impact on the economic and social landscape of India goes beyond its initial years. The company has been instrumental in industrialisation of the region and is continuing to mark India’s presence in the global landscape.

By 1970, the company emerged as a major employment generator. Almost 40,000 people were employed by the company in Jamshedpur and many more in the nearby coal mines. By 2000s, the company was producing 5MT steel annually, which soared to almost 20MT by 2020.

The company’s corporate social responsibility initiatives have transformed lives, focusing on education, healthcare, and rural development.

About Tata Steel – India’s first steel industry in modern India

India is known for its steel production. The country has several prominent steel manufacturers with integrated and mini steel plants. The state of Jharkhand is known for its steel plants by Tata Steel (Kalinganagar, Jamshedpur), Bokaro Steel Plant (SAIL), MECON steel plant (Ranchi) and Electrosteel Limited (Vedanta), Bokaro. Here we’ll take a look at Tata Steel and its contribution to the steel sector in India.

Also read: SAIL vs Tata Steel

Tata Steel is often regarded as India’s lowest cost steel producer. It maintains two integrated manufacturing facilities, at Jamshedpur and Kalinganagar (third plant is at Dhenkanal, Odisha). Moreover, it also operates captive mines across Jharkhand and the neighbouring states of West Bengal and Odisha for iron ore, coal, manganese, dolomite and chromite. This naturally gives Tata Steel operational and cost advantages as its major raw material requirements are from captive sources. It also keeps production levels efficient and optimised.

Today, Tata Steel has an estimated annual turnover of USD 31 billion (2023) excluding SEA operations. It has an approximate overall capacity of 26 MTPA which it aims to scale to 40 MTPA over the next decade (Source: Townpost).

Tata Steel’s product list catalogue is exhaustive and it caters to all businesses across automotive, energy and power, engineering, shipbuilding, rail and defence, and other sectors. Some of its top products include:

• TMT bars and steel wires
• Hot and Cold Rolled products
• Galvanised and coated products
• Steel tubes and pipes

On 9 Aug 2024, Tata Steel stock price stood at ₹151.7 at the NSE.

Also read: Steel industry and the stock market

In recent news:

• In October 2023, Tata Steel held the groundbreaking ceremony for its upcoming plant in Ludhiana. It is a scrap-based electric arc furnace plant, with an estimated capacity of 0.75 MTPA. The plant is expected to be commissioned by Q1, 2025 and will get an initial investment of ₹2,600 crores. (Source – The Hindu Business Line, October 2023). It is also expected that the initiative will create employment in the region for almost 500 individuals directly and 2000 people indirectly. Steel is a major player in the Ludhiana and Mandi Gobindgarh clusters and is home to other units like JSW Steels, Hero Steels, etc.
  (Also read: Mandi Gobindgarh steel price today and Mandi Gobindgarh steel ingot price)
• In its initiatives towards sustainability, Tata Steel in now the first Indian steel company to use LNG fuel for its bulk cargo carriers for imports. On 23 June, Dharma Port, Odisha saw the first unloading of coal by Tata Steel using a cape-sized LNG fuel carrier.

Did you know?

Though TISCO (now Tata Steel Limited) marked the establishment of the first iron and steel industry in India, it is SAIL’s Rourkela Steel Plant in Odisha, that is known for being the country’s first integrated steel mill? Read more about steel plants in Odisha – a state with 50+ steel plants.

The future of steel production and steel plants in India

From the time the 1st iron and steel industry in India was founded, to recent times, domestic demand for steel is increasing. It is expected to grow by 7.5% annually. There’s also increased opportunities for steel exports and new policies introduced to keep daily steel price in check. It is estimated that India’s finished steel consumption will reach 230MT by 2030-31. The government’s schemes and policies, such as the specialty steel Production-Linked Incentive (PLI) scheme, further is enabling the rise of the steel sector. (Source: IBEF).

Also read:  Budget 2024 – Initiatives for infrastructure development in India

But there are challenges in the steel industry as well. For instance, the iron and steel industry is a labour and capital intensive sector. Though labour is easily available, there is the dearth of skilled labour. Moreover, lack of capital often makes it challenging for smaller businesses to enter the market, or even for existing businesses to expand production capacity.

Similarly, from the supply chain side, there are supply chain challenges in the steel sector. For instance, when it comes to transportation, the landlocked location of the steel plants in India, often leaves railways as the only viable and cost-effective solutions for the movement of goods. Railways, however, often lack the modern equipment and infrastructure requirements for managing steel transportation, leading to delays, damages, and hence cost escalations.

Innovation and technology adoption in the iron and steel industry in India

Steel industry is transforming. Moving from traditional manufacturing methods, it is now adopting new technologies for innovation.

• Environmental concern is making many steel manufacturers turn to green steel manufacturing (i.e., using hydrogen-based steelmaking) to reduce waste, carbon footprint, and promote sustainability.
• Manufacturing new steel alloys with additional properties (e.g., tensile strength, lightweight, durable, etc.) are being studied and made, for a range of applications and industry requirements. (E.g., Learn about TMX steel)
• Technology like 3D printing or additive manufacturing is enabling agile and aesthetic design creation (prototype) reducing waste and enabling creation of better designs.

Also read:  Budget 2024 – Sustainability initiatives and incentives for a green economy

That being said, the potential for the sector is huge. The 2024 steel sector industry outlook and growth prospects was promising. At that point, per capita consumption of steel stood more than 86.7 kgs in 2024.