[Promising Sectors for Entering India ④] The Steel Industry

"Exploring the Steel Sector as a Promising Industry for Entering the Indian Market"

-Where Steel Flows, Capital and People Gather- Steel is the backbone of industry and the core of cost competitiveness. India is currently the world’s second-largest steel producer and its fastest-growing consumer market. In 2024, India recorded a production of 149.6 million tons—a phenomenal 6.3% increase from the previous year. Furthermore, the Indian government is executing an ambitious plan to boost production capacity to 300 million tons by 2030. Let’s take a closer look at the steel sector, the fourth installment in our series on promising industries for entering the Indian market. 1. The Footsteps of Giants: Paths Paved by POSCO and Hyundai Steel Korean steel giants POSCO and Hyundai Steel have already designated India as a core strategic hub. POSCO: In partnership with India’s largest steelmaker, JSW Steel, POSCO is establishing an integrated steel mill in Odisha with an annual capacity of 6 million tons. This is a strategic alliance that goes beyond simple production to transplant eco-friendly "Green Steel" technology. Hyundai Steel: By completing a Steel Service Center (SSC) in Pune —the mecca of the automotive industry—Hyundai Steel is providing robust support for Hyundai and Kia Motors’ expansion into the Indian market. Shipbuilding Industry: HD Hyundai has signed an agreement with the Tamil Nadu state government and is pursuing the construction of local shipyards through cooperation with India's Cochin Shipyard and Swan Energy . Samsung Heavy Industries has also signed an MOU with Swan Energy. The Opportunity: The entry of these major conglomerates signals a massive "trickle-down effect" for Korean small and medium-sized enterprises (SMEs) possessing related parts, equipment, and processing technologies. 2. Six Promising ‘Indian Steel’ Fields for Korean SMEs While large corporations manage "upstream" processes (steelmaking), Korean SMEs should aim for victory in "downstream" processes (processing and services) and technical solutions. Promising Field Entry Strategy and Rationale Scrap & Recycling Tech Rapidly growing demand for automated steel scrap sorting and processing technology following India’s Electric Arc Furnace (EAF) expansion policy. Pipes & Tubes Expansion of demand for structural tubes and ERW (Electric Resistance Welding) pipes driven by the infrastructure construction boom. Rolling/Processing Automation Supply of Korean inspection equipment and software to stabilize the quality of local small and medium-sized rolling mills. Automotive Steel Processing High-strength steel (AHSS) forming and coating technologies necessitated by the increase in EV and luxury sedan production in India. Special Fasteners (Bolts/Nuts) Targeting the need for localization of high-precision, high-strength parts for the railway, automotive, and aerospace sectors. Logistics & SCM Solutions IoT-based inventory management and logistics SaaS to improve India’s complex steel distribution structure. 3. Checklist for the Future: Risk Management While the Indian market is attractive, "India-specific" variables remain. The following three factors must be considered when establishing marketing and business strategies: Policy Volatility: Safeguard duties (protective tariffs) to block low-cost Chinese imports can fluctuate frequently. This is why "local production" is the safest answer. Administrative and Regulatory Barriers: Local issues regarding land acquisition or environmental permits may arise. As seen in previous cases, a Joint Venture (JV) with a reliable local partner is often more advantageous than a solo entry. Transition to Green Steel: There is mounting pressure to introduce low-carbon processes to respond to international regulations such as the Carbon Border Adjustment Mechanism (CBAM). Closing Thoughts The Indian government’s "Make in India" policy is not just about imports; it strongly emphasizes "manufacturing within India." India is looking for technical and human resource partners who can help elevate the country's overall manufacturing capabilities , rather than just selling products. Steel is the foundation of all industries and serves as the fundamental base for all manufacturing sectors. If India’s massive market is combined with Korea’s sophisticated processing technology , the Indian steel market will become the most solid platform for growth for our companies.