Stainless steel players have pinned their hopes on urban consumption and central infrastructure initiatives such as ‘Smart Cities’, to boost the country's stainless steel consumption.
The industry, which has a combined installed capacity of about five million tonnes, is faced with challenges from cheap imports of products from neighbouring countries. This poses a threat on the economic viability of operations and sustenance of the units, which are currently operating at an average 60-65 per cent capacity. On the sidelines of an awareness programme in Ahmedabad on Friday, K K Pahuja, President, Indian Stainless Steel Development Association (ISSDA), stated that India's per capita stainless steel consumption stands at a meagre 2.2 kg, compared to the global average of 6 kg and 10 kg in China.
"There are two main challenges that our industry faces. First is the shortage of raw materials such as stainless steel scrap and ferro nickel. Both have to be imported with a duty of 2.5 % each. Secondly, we face trade issues because India has a Free Trade Agreement with two of the major Stainless Steel producers," said Pahuja.
The largest consuming segment remains utensils and kitchenwares, with about 50 per cent share in the overall consumption in the country. But the architecture, building, and construction segment along with automotive, railways, and transport are emerging as the fastest growing segments for stainless steel consumption.
"With 8-9 per cent growth rate, India is the fastest growing stainless steel market globally with world average growth rate being in the range of 2-3 per cent," said Pahuja.