Indian metallurgy may face obstacles in raw material supply

The expansion of India's steel production capacity comes at an opportune time for the industry, as the country has been undertaking large-scale infrastructure projects such as national highways in the last few years. Now that the country is in the midst of a general election and if the incumbent government returns to power, infrastructure projects are likely to get a further boost through policy continuity.

Even though India has overtaken Japan as the world's second-largest steel producer over the past few years, steel production is a fairly capital-intensive business and a significant portion of production costs are driven by raw material prices. In such a scenario, the question arises whether the Indian steel sector will be comfortably positioned in terms of access to conventional and non-traditional raw materials in the future.