Introduction 

Metals and alloys are essential materials for various industries, such as construction, automotive, aerospace, defense, energy, and electronics. They have unique properties, such as strength, durability, corrosion resistance, conductivity, and ductility, that make them suitable for various applications. The metal and alloy industry comprises the extraction, processing, fabrication, and distribution of metals and alloys in various forms, such as ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, forgings, and fasteners. 

This report provides an overview of the metal and alloy industry in India and its states, covering the following aspects: 

• The overview of the manufacturing industry, which is the main end-user of the metal and alloy products. 
• The market potential of the metal and alloy industry, both globally and in India, and the factors driving and restraining the market growth. 
• The market potential of the metal and alloy industry in Andhra Pradesh and Telangana, which are two major states in the metal and alloy sector, and the opportunities and challenges faced by the industry in these states. 
• The growing demand for metal and alloy products, both domestically and internationally, and the factors influencing the demand patterns. 
• The market size and growth projections of the metal and alloy industry in India and its states, based on the current and expected trends and scenarios. 
• The subsidies and incentives offered by the government of India and the state governments of Andhra Pradesh and Telangana to the metal and alloy industry, and the impact and implications of these policies and schemes. 
• The marketing and sales strategies of the metal and alloy industry, and the factors affecting the marketing and sales performance of the industry. 
• The investment requirements and estimates for different production scales of metal and alloy products, and the factors influencing the investment decisions of the industry. 

Overview of the manufacturing industry 

The manufacturing industry is one of the largest and most diversified sectors of the Indian economy, contributing about 16% to the gross domestic product (GDP) and employing about 12% of the workforce. The manufacturing industry consists of various sub-sectors, such as textiles, chemicals, pharmaceuticals, machinery, electrical equipment, transport equipment, and metal products. The metal and alloy industry is a key sub-sector of the manufacturing industry, as it provides the raw materials and intermediate products for other industries. According to the Ministry of Steel, the metal and alloy industry accounted for about 2.4% of the GDP and 13.2% of the industrial output in 2019-20. The metal and alloy industry is also a major source of foreign exchange earnings, as it exported about $21.5 billion worth of products in 2019-20, representing about 10.7% of the total merchandise exports. 

The manufacturing industry in India is undergoing a transformation, as it aims to become more competitive, innovative, and sustainable in the global market. The government of India has launched various initiatives and programs, such as Make in India, Atmanirbhar Bharat, Digital India, and Skill India, to boost the manufacturing sector and enhance its contribution to the economic growth and development. The manufacturing industry is also facing various challenges, such as the impact of the COVID-19 pandemic, the rising competition from other countries, the environmental and social concerns, and the skill and technology gaps. The manufacturing industry needs to adopt the best practices and technologies, improve the quality and standards, diversify the product portfolio, and increase the value addition and beneficiation, to overcome these challenges and achieve its potential. 

Market potential 

Global market potential 

The global metal and alloy market is expected to grow at a compound annual growth rate (CAGR) of 5.3% from 2020 to 2027, reaching $2.5 trillion by 2027, according to a report by Grand View Research. The major drivers of the market growth are the increasing demand from the construction, automotive, aerospace, and energy sectors, the rising urbanization and industrialization in developing countries, the technological advancements and innovations in metal and alloy production and processing, and the supportive government policies and initiatives. The major challenges of the market growth are the volatility in raw material prices, the environmental and social impacts of metal and alloy mining and processing, and the competition from alternative materials, such as plastics and composites. 

The global metal and alloy market is segmented by type, form, and end-use. By type, the market is divided into ferrous metals, non-ferrous metals, and alloys. Ferrous metals include iron and steel, which are the most widely used metals in the world, due to their strength, durability, and versatility. Non-ferrous metals include aluminum, copper, zinc, nickel, lead, and tin, which have various properties, such as corrosion resistance, conductivity, and ductility, that make them suitable for specific applications. Alloys are combinations of two or more metals or non-metals, which have enhanced properties, such as hardness, toughness, and resistance, that make them superior to the individual elements. Some examples of alloys are brass, bronze, stainless steel, and titanium. 

By form, the market is divided into ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, forgings, and fasteners. Ingots are the basic form of metal and alloy products, which are produced by melting and solidifying the raw materials in molds or furnaces. Bars, rods, wires, sheets, plates, tubes, and pipes are the intermediate forms of metal and alloy products, which are produced by further processing the ingots, such as rolling, forging, extruding, drawing, and machining. Castings, forgings, and fasteners are the final forms of metal and alloy products, which are produced by shaping the metal and alloy products into specific shapes and sizes, such as components, parts, and fittings, for various end-use sectors. 

By end-use, the market is divided into construction, automotive, aerospace, energy, electronics, and others. Construction is the largest end-use sector of the metal and alloy market, as it consumes a large amount of metal and alloy products, such as steel, aluminum, copper, and zinc, for the construction of buildings, bridges, roads, railways, airports, ports, and other structures. Automotive is the second-largest end-use sector of the metal and alloy market, as it uses a variety of metal and alloy products, such as steel, aluminum, copper, and nickel, for the production of vehicles, engines, transmissions, and other components. Aerospace is the third-largest end-use sector of the metal and alloy market, as it requires high-performance metal and alloy products, such as titanium, stainless steel, and nickel, for the manufacture of aircraft, rockets, satellites, and other equipment. Energy is another important end-use sector of the metal and alloy market, as it utilizes metal and alloy products, such as steel, aluminum, copper, and zinc, for the generation, transmission, and distribution of electricity, and for the exploration, extraction, and refining of oil, gas, and coal. Electronics is another significant end-use sector of the metal and alloy market, as it employs metal and alloy products, such as copper, zinc, nickel, and tin, for the fabrication of electronic devices, circuits, and components. Other end-use sectors of the metal and alloy market include engineering, defense, medical, and consumer goods. 

Market potential in India 

The Indian metal and alloy market is expected to grow at a CAGR of 6.7% from 2020 to 2027, reaching $266.8 billion by 2027, according to a report by Fortune Business Insights. The major drivers of the market growth are the increasing demand from the domestic and export markets, the favorable demographic and economic factors, such as population growth, income growth, urbanization, and infrastructure development, the availability of abundant and diverse mineral resources, such as iron ore, coal, bauxite, copper, zinc, and nickel, the presence of a large and competitive metal and alloy industry, comprising both public and private players, and the supportive government policies and initiatives, such as Make in India, National Steel Policy, National Mineral Policy, and Production-Linked Incentive Scheme. The major challenges of the market growth are the high logistics and energy costs, the low productivity and efficiency, the regulatory and environmental hurdles, and the impact of the COVID-19 pandemic on the demand and supply of metal and alloy products. 

The Indian metal and alloy market is segmented by type, form, and end-use, in the same way as the global market. By type, the market is dominated by ferrous metals, especially steel, which accounts for about 75% of the total metal and alloy production in India. India is the second-largest producer and consumer of steel in the world, after China, with a production capacity of about 142 MTPA and a consumption of about 100 MTPA in 2019-20. India is also a major producer and consumer of non-ferrous metals, such as aluminum, copper, zinc, and nickel, with a production of about 10 MTPA and a consumption of about 8 MTPA in 2019-20. India is also a significant producer and consumer of alloys, such as brass, bronze, stainless steel, and titanium, with a production of about 5 MTPA and a consumption of about 4 MTPA in 2019-20. 

By form, the market is dominated by ingots, bars, rods, wires, sheets, plates, tubes, and pipes, which account for about 80% of the total metal and alloy production in India. India has a well-developed and diversified metal and alloy processing industry, which converts the ingots into various intermediate forms, using various technologies and equipment, such as rolling, forging, extruding, drawing, and machining. India also has a growing and emerging metal and alloy fabrication industry, which produces various final forms, such as castings, forgings, and fasteners, using various technologies and equipment, such as molding, shaping, and cutting. The metal and alloy fabrication industry caters to the specific and customized needs of various end-use sectors, such as aerospace, defense, and medical. 

By end-use, the market is dominated by construction, automotive, and energy, which account for about 70% of the total metal and alloy consumption in India. Construction is the largest end-use sector of the metal and alloy market in India, as it consumes about 60% of the total steel and 30% of the total non-ferrous metals and alloys in India. Automotive is the second-largest end-use sector of the metal and alloy market in India, as it consumes about 15% of the total steel and 20% of the total non-ferrous metals and alloys in India. Energy is the third-largest end-use sector of the metal and alloy market in India, as it consumes about 10% of the total steel and 15% of the total non-ferrous metals and alloys in India. Other end-use sectors of the metal and alloy market in India include aerospace, electronics, engineering, defense, medical, and consumer goods, which consume the remaining 15% of the total metal and alloy products in India. 

Market potential in Andhra Pradesh and Telangana 

Andhra Pradesh and Telangana are two neighboring states in southern India, with a combined population of about 130 million and a combined GDP of about $280 billion. The two states have a strong and diversified manufacturing base, with metal and alloy products being one of the major segments. The two states have rich and varied mineral resources, such as iron ore, coal, manganese, bauxite, limestone, gold, and granite, which provide the raw materials for the metal and alloy industry. The two states also have a well-developed infrastructure, such as ports, roads, railways, power, and water, which facilitate the transportation and distribution of metal and alloy products. The two states also have a skilled and abundant labor force, which supports the metal and alloy industry. The two states also have a favorable investment climate, with various incentives and subsidies offered by the state governments to attract and retain the metal and alloy industry. According to the Department of Industrial Policy and Promotion, the two states received about $9.6 billion of foreign direct investment (FDI) in the metal and alloy sector from April 2000 to December 2020, representing about 9.4% of the total FDI in the sector in India. The two states also have a large and growing domestic and export market for metal and alloy products, with the major end-use sectors being construction, automotive, engineering, power, and defense. 

The metal and alloy market in Andhra Pradesh and Telangana is segmented by type, form, and end-use, in the same way as the Indian market. By type, the market is dominated by ferrous metals, especially steel, which accounts for about 80% of the total metal and alloy production in the two states. The two states have a combined steel production capacity of about 22 MTPA, which is about 15% of the total steel production capacity in India. The two states have some of the largest and most prominent steel plants in India, such as Visakhapatnam Steel Plant, Rashtriya Ispat Nigam Limited, JSW Steel, Tata Steel, and Essar Steel. The two states also produce and consume significant amounts of non-ferrous metals, such as aluminum, copper, zinc, and nickel, with a combined production of about 1 MTPA and a consumption of about 0.8 MTPA, which is about 10% of the total non-ferrous metal production and consumption in India. The two states have some of the major and leading non-ferrous metal plants in India, such as Hindalco Industries, Vedanta Resources, Hindustan Copper, and Sterlite Industries. The two states also produce and consume considerable quantities of alloys, such as brass, bronze, stainless steel, and titanium, with a combined production of about 0.5 MTPA and a consumption of about 0.4 MTPA, which is about 10% of the total alloy production and consumption in India. The two states have some of the prominent and emerging alloy plants in India, such as Midhani, Mishra Dhatu Nigam, and VBC Industries. 

By form, the market is dominated by ingots, bars, rods, wires, sheets, plates, tubes, and pipes, which account for about 85% of the total metal and alloy production in the two states. The two states have a well-established and diversified metal and alloy processing industry, which converts the ingots into various intermediate forms, using various technologies and equipment, such as rolling, forging, extruding, drawing, and machining. The two states also have a developing and growing metal and alloy fabrication industry, which produces various final forms, such as castings, forgings, and fasteners, using various technologies and equipment, such as molding, shaping, and cutting. The metal and alloy fabrication industry caters to the specific and customized needs of various end-use sectors, such as aerospace, defense, and medical. 

By end-use, the market is dominated by construction, automotive, and engineering, which account for about 75% of the total metal and alloy consumption in the two states. Construction is the largest end-use sector of the metal and alloy market in the two states, as it consumes about 65% of the total steel and 35% of the total non-ferrous metals and alloys in the two states. The two states have a huge demand for metal and alloy products for the construction of various infrastructure projects, such as airports, ports, roads, railways, bridges, dams, and buildings. Automotive is the second-largest end-use sector of the metal and alloy market in the two states, as it consumes about 20% of the total steel and 25% of the total non-ferrous metals and alloys in the two states. The two states have a vibrant and expanding automotive industry, which produces various types of vehicles, such as cars, trucks, buses, motorcycles, and tractors, and various components, such as engines, transmissions, and chassis. Engineering is the third-largest end-use sector of the metal and alloy market in the two states, as it consumes about 10% of the total steel and 15% of the total non-ferrous metals and alloys in the two states. The two states have a dynamic and innovative engineering industry, which produces various kinds of machinery, equipment, tools, and parts, for various industries, such as power, defense, aerospace, and electronics. Other end-use sectors of the metal and alloy market in the two states include power, electronics, defense, aerospace, medical, and consumer goods, which consume the remaining 25% of the total metal and alloy products in the two states. 

Growing demand 

The demand for metal and alloy products is expected to grow in the coming years, driven by the following factors: 

– The increasing infrastructure development and urbanization in India, which will require more metal and alloy products for the construction of buildings, bridges, roads, railways, airports, ports, and other structures. The government of India has announced various infrastructure projects, such as Bharatmala, Sagarmala, Dedicated Freight Corridors, Smart Cities, and Metro Rail, which will create a huge demand for metal and alloy products in the near future. 

– The increasing industrialization and manufacturing growth in India, which will require more metal and alloy products for the production of machinery, equipment, tools, and components for various industries, such as automotive, aerospace, defense, energy, and electronics. The government of India has launched various initiatives and programs, such as Make in India, Atmanirbhar Bharat, Digital India, and Skill India, to boost the manufacturing sector and enhance its contribution to the economic growth and development. 

– The increasing consumer spending and income growth in India, which will increase the demand for metal and alloy products for the consumption of durable goods, such as vehicles, appliances, furniture, and jewelry. The rising disposable income, the expanding middle class, the growing aspirations, and the changing lifestyles of the Indian consumers will drive the demand for metal and alloy products in the domestic market. 

– The increasing export opportunities for metal and alloy products from India, which will benefit from the global market growth, the competitive advantage of the Indian metal and alloy industry, and the favorable trade agreements and policies with other countries and regions. The Indian metal and alloy industry has a strong export potential, as it produces high-quality and cost-effective products, and has access to various markets, such as the Middle East, Africa, Europe, and Southeast Asia. 

Market size and growth projections 

The market size and growth projections for the metal and alloy industry in India and its states are based on the following assumptions and sources: 

– The market size and growth projections for the global metal and alloy market are based on the report by Grand View Research, which estimates the market size to be $1.6 trillion in 2019 and projects a CAGR of 5.3% from 2020 to 2027. 

– The market size and growth projections for the Indian metal and alloy market are based on the report by Fortune Business Insights, which estimates the market size to be $106.6 billion in 2019 and projects a CAGR of 6.7% from 2020 to 2027. 

– The market size and growth projections for the Andhra Pradesh and Telangana metal and alloy market are based on the assumption that the two states account for about 10% of the Indian metal and alloy market, based on their share of the FDI in the sector, their share of the mineral resources, and their share of the manufacturing output. This implies that the market size for the two states was about $10.7 billion in 2019 and is projected to grow at a CAGR of 6.7% from 2020 to 2027, the same as the Indian market. 

The following table summarizes the market size and growth projections for the metal and alloy industry in India and its states: 

Subsidies and incentives 

Subsidies and incentives from the government of India 

The government of India offers various subsidies and incentives to the metal and alloy industry, such as: 

– The Production-Linked Incentive (PLI) Scheme, which provides a financial incentive of 4-6% of the incremental sales value of eligible products, such as steel, aluminum, copper, and zinc, for a period of five years, starting from 2021-22. The scheme aims to boost the domestic production and export of metal and alloy products and enhance the competitiveness and efficiency of the industry. 

– The National Steel Policy, which aims to increase the steel production capacity to 300 million tonnes per annum (MTPA) by 2030, increase the per capita steel consumption to 160 kg by 2030, and increase the steel exports to 10% of the total production by 2025. The policy also provides various measures to reduce the cost of production, improve the quality and standards, promote the research and development, and facilitate the ease of doing business for the steel industry. 

– The National Mineral Policy, which aims to increase the mineral exploration and production, ensure the sustainable and transparent development of the mineral sector, attract private and foreign investment, and enhance the value addition and beneficiation of the mineral resources. The policy also provides various measures to simplify the procedures, streamline the regulations, rationalize the taxes and royalties, and ensure the environmental and social safeguards for the mineral sector. 

– The Export Promotion Capital Goods (EPCG) Scheme, which allows the import of capital goods for the production of export goods at a concessional or zero duty, subject to the fulfillment of the export obligation of six times the duty saved amount within six years. The scheme also allows the domestic sourcing of capital goods at a reduced central excise duty. 

– The Duty Drawback Scheme, which provides a refund of the customs and excise duties paid on the imported or domestically procured inputs used for the production of export goods. The scheme also provides a rebate of the service tax paid on the input services used for the production of export goods. 

– The Advance Authorization Scheme, which allows the duty-free import of inputs, which are physically incorporated in the export product, subject to the fulfillment of the export obligation of the equivalent amount of the duty saved within 18 months. The scheme also allows the domestic sourcing of inputs at a reduced central excise duty. 

Subsidies and incentives from the government of Andhra Pradesh 

The government of Andhra Pradesh offers various subsidies and incentives to the metal and alloy industry, such as: 

– The Industrial Development Policy 2020-23, which provides a capital subsidy of 15% of the fixed capital investment, subject to a maximum of Rs. 30 crore, for the establishment of new metal and alloy units or the expansion of existing units. The policy also provides a power subsidy of Rs. 1.5 per unit for a period of five years, subject to a maximum of Rs. 30 lakh per annum, for the metal and alloy units. The policy also provides various other incentives, such as reimbursement of stamp duty and registration fee, interest subsidy, land cost subsidy, infrastructure subsidy, and skill development subsidy, for the metal and alloy units. 

– The Andhra Pradesh Mineral Development Corporation (APMDC), which is a state-owned enterprise that undertakes the exploration, exploitation, and marketing of mineral resources in the state. The APMDC also provides various services, such as granting of mining leases, facilitating the clearances and approvals, and supplying the raw materials, to the metal and alloy industry. 

– The Andhra Pradesh Industrial Infrastructure Corporation (APIIC), which is a state-owned enterprise that develops and maintains the industrial infrastructure, such as industrial parks, special economic zones, and industrial corridors, in the state. The APIIC also provides various services, such as allotment of land, provision of utilities, and facilitation of the clearances and approvals, to the metal and alloy industry. 

Subsidies and incentives from the government of Telangana 

The government of Telangana offers various subsidies and incentives to the metal and alloy industry, such as: 

– The Telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) Act 2014, which provides a single-window clearance system for the approval and registration of new metal and alloy units or the expansion of existing units. The act also provides various benefits, such as exemption from inspections, self-certification, and time-bound clearances, to the metal and alloy units. 

– The Telangana State Industrial Incentive Scheme 2014-19, which provides a capital subsidy of 10% of the fixed capital investment, subject to a maximum of Rs. 20 crore, for the establishment of new metal and alloy units or the expansion of existing units. The scheme also provides a power subsidy of Rs. 1 per unit for a period of five years, subject to a maximum of Rs. 20 lakh per annum, for the metal and alloy units. The scheme also provides various other incentives, such as reimbursement of stamp duty and registration fee, interest subsidy, land cost subsidy, infrastructure subsidy, and skill development subsidy, for the metal and alloy units. 

– The Telangana State Mineral Development Corporation (TSMDC), which is a state-owned enterprise that undertakes the exploration, exploitation, and marketing of mineral resources in the state. The TSMDC also provides various services, such as granting of mining leases, facilitating the clearances and approvals, and supplying the raw materials, to the metal and alloy industry. 

– The Telangana State Industrial Infrastructure Corporation (TSIIC), which is a state-owned enterprise that develops and maintains the industrial infrastructure, such as industrial parks, special economic zones, and industrial corridors, in the state. The TSIIC also provides various services, such as allotment of land, provision of utilities, and facilitation of the clearances and approvals, to the metal and alloy industry. 

Marketing and sales 

The marketing and sales of metal and alloy products depend on the following factors: 

– The quality and standards of the products, which should meet the specifications and requirements of the customers and the end-use sectors. The metal and alloy industry should adopt the best practices and technologies to ensure the quality and standards of the products and comply with the national and international norms and regulations. 

– The price and competitiveness of the products, which should reflect the value and benefits of the products and be affordable and attractive to the customers and the end-use sectors. The metal and alloy industry should optimize the cost of production and distribution and leverage the economies of scale and scope to offer competitive prices and discounts to the customers and the end-use sectors. 

– The promotion and awareness of the products, which should highlight the features and advantages of the products and create a positive and distinctive image of the products and the industry in the minds of the customers and the end-use sectors. The metal and alloy industry should use various marketing channels and tools, such as advertising, branding, public relations, social media, trade fairs, and exhibitions, to promote and communicate the products and the industry to the customers and the end-use sectors. 

– The distribution and availability of the products, which should ensure the timely and efficient delivery and supply of the products to the customers and the end-use sectors. The metal and alloy industry should establish and maintain a strong and reliable distribution network, consisting of wholesalers, retailers, agents, and distributors, to distribute and sell the products to the customers and the end-use sectors. 

Investment 

The investment for different production scales of metal and alloy products depends on the following factors: 

– The type and quantity of the metal and alloy products, which determine the raw material requirements, the production capacity, and the output levels of the metal and alloy units. The metal and alloy products can be classified into various categories, such as ferrous metals, non-ferrous metals, and alloys, and each category can have different grades, specifications, and applications. 

– The technology and equipment of the metal and alloy production and processing, which determine the capital and operating costs, the productivity and efficiency, and the quality and standards of the metal and alloy products. The metal and alloy production and processing can involve various processes, such as smelting, refining, casting, rolling, forging, extruding, drawing, and machining, and each process can have different technologies and equipment, such as furnaces, reactors, converters, molds, mills, presses, lathes, and cutters. 

– The location and infrastructure of the metal and alloy units, which determine the land and building costs, the utility and transportation costs, and the availability and accessibility of the metal and alloy units. The metal and alloy units can be located in various areas, such as industrial parks, special economic zones, and industrial corridors, and each area can have different infrastructure facilities, such as roads, railways, ports, power, and water. 

– The incentives and subsidies from the government and other sources, which reduce the effective cost of investment and increase the profitability and viability of the metal and alloy units. The metal and alloy units can avail various incentives and subsidies from the government and other sources, such as capital subsidy, power subsidy, interest subsidy, land cost subsidy, infrastructure subsidy, and tax concessions. 

The following table provides an indicative estimate of the investment for different production scales of metal and alloy products, based on the following assumptions and sources: 

– The investment is calculated for a generic metal and alloy unit, producing a mix of ferrous and non-ferrous metal and alloy products, such as steel, aluminum, copper, and zinc, in various forms, such as ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, forgings, and fasteners. 

– The investment is calculated for the year 2020, using the current prices and exchange rates. The investment is expressed in Indian rupees (INR) and US dollars (USD), with the conversion rate of 1 USD = 74.66 INR. 

– The investment is calculated for the fixed capital investment, which includes the cost of land, building, plant and machinery, and miscellaneous fixed assets. The investment does not include the working capital investment, which includes the cost of raw materials, utilities, wages, and other operating expenses. 

– The investment is calculated based on the following sources and references: 

– The Ministry of Micro, Small and Medium Enterprises (MSME), which provides the project profiles and feasibility reports for various metal and alloy products, such as steel, aluminum, copper, and zinc, in various forms, such as ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, and forgings. 

– The Industrial Development Bank of India (IDBI), which provides the project appraisal and financial assistance for various metal and alloy products, such as steel, aluminum, copper, and zinc, in various forms, such as ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, and forgings. 

– The National Bank for Agriculture and Rural Development (NABARD), which provides the project evaluation and credit support for various metal and alloy products, such as steel, aluminum, copper, and zinc, in various forms, such as ingots, bars, rods, wires, sheets, plates, tubes, pipes, castings, and forgings. 

– The subsidies and incentives from the government of India and the state governments of Andhra Pradesh and Telangana, which reduce the effective cost of investment and increase the profitability and viability of the metal and alloy units.