Growth in internal demand, implementation of government schemes and new measures will play a vital role in reviving the domestic metals industry in 2017, a report said.
"The Indian metals industry passed through a period of turbulence in 2015 and 2016. However, the government's recent measures to curb imports and introduction of price floor on select existing imports will play a major role in enabling the revival of the domestic metals industry," Dun & Bradstreet (D&B) said in its report on 'Metals and Mining sectoral outlook 2017' said.
The metals and mining industry predominantly derives its demand from growth of sectors such as infrastructure, construction, automobile, power and electronics, etc.
The most significant growth opportunity going forward is expected to come from government schemes such as "Make in India", "Smart Cities" program, 100 per cent rural electrification and "Housing for All", it said.
The report pointed out that the low cost imports have adversely impacted the domestic steel industry.
In 2016, the world steel production remained flat as compared to the previous year. All the major steel producing countries in the world have registered a decline or significant reduction in production, with India being the only exception.
For the period January-October 2016, crude steel production in India increased to 79.2 million tonnes, registering a growth of 6 per cent, as compared to the corresponding period in the previous year.
However, the unfavourable market for steel globally has negatively impacted the Indian steel industry too.
The implementation of the Minimum Import Price (MIP) on select steel imports played a vital role in protecting the domestic players, the report added.
The oversupply of steel in India will deeply hinder the ability of domestic manufacturers to increase prices, thereby likely impacting their growth during 2017.
The government's strong focus on increasing manufacturing in India through its 'Make in India' campaign and expected increase in infrastructure spending for roads, rail and ports are expected to boost demand for steel in India, D&B report said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
