Porter’s Analysis of Indian Steel Industry

Post independence, steel industry in India came under the regulatory framework of Government of India, which stipulated that steel industry be reserved under the public sector. It also stipulated that capacity creation and enhancement would require licensing, and that pricing and distribution of steel would be subject to govt. control. Nationalization of TISCO, that existed from before independence could not be carried out due to popular pressure[3].

Economic reforms were started in 1991 with the new industrial policy- licensing requirement for capacity enhancement was withdrawn, and the industry was opened to private and foreign players. Pricing and distribution controls were removed in 1992. import/export restrictions were removed and import duty rates have been slashed. Policies like reduction in import duties for capital goods, convertibility of the rupee on trade account, permission to mobilize resources from overseas financial markets, and tax structure rationalization have helped the industry performance.

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