India has achieved the position of second biggest steel producer of the world. But it has to substantially increase its production level. This is because India has not reached the level of development at the desired level. In an interview with BE’s Kishore Kumar Biswas, Dr. Debashish Bhattacharjee, Vice President, Technology and New Material Business, Tata Steel, points out various aspects including the challenges before India in producing steel of a very high quantity in the country. Excerpts follow:
Q. What is your outlook about the steel industry in India?
A. We all know that the necessity of steel is intimately related to the growth and development of a country. Steel is one of the inevitable inputs of roads, bridges, railways, automobiles, houses, ship building, electricity, etc. In the case of a developing a country like India where the per capita consumption of steel is as low as about 60 kg (unlike a high developed country for whom it's around 300 kg and stabilises at that), it has a huge potential for growth of steel production. The country will eventually be developed. Therefore, necessity of steel for developmental work will be huge. So, in India there has been a huge potential for the growth of the steel industry.
Consider China. Its per capita annual steel consumption is about 600 kg. This is because it has been building huge infrastructure throughout the country. But gradually India will reach the development level of developed countries. Then per capita steel consumption will be about four times the present consumption level.
Q. But our development is constrained by many factors.
A. That is true. I am not saying that India will achieve the level of a high development stage shortly. It may take many years. What I want to say is that it will become developed in future. For this purpose one has to consider two things. One is the rate of growth of GDP of a country. That is, how long it will take to become developed if India grows at a particular rate of GDP. Secondly, growth depends on financial ability and market demand of the product. In a developing country like India financial ability and the level of market demand have some limitations. These depend on government’s expenditure on developing infrastructure and other factors. So, we may have to wait for many years. But India will remain a highly growing economy.
Q. Do you think that we have the ability to become world leader in steel?
A. There are some factors needed to lead the world. The question is whether we will be a sustainable leader. Sustainable leadership is related to the environment, cost of production, and human resources. Most of the big steel producers are trying to be the leader of cost reduction. At present Tata Steel is the cost leader in the country. Then there comes the question of technology leadership. In technology leadership I think India can take leadership if it opts for that. The bright examples that I can point out here are space research and atomic energy research. India has made good progress in these two areas on its own. This progress has helped even many small entrepreneurs in various ways.
Another thing is that technological innovation cannot happen only for its sake. That should be driven by market forces, that is, by financial interests. The innovation of most of the steel producers of Japan and Europe were driven by the changing demand for the automotive industry. The government restrictions on some items like fuel consumption and carbon emission from the automobiles were the reasons behind the increasing demand for light but hard steel from the steel industry. These faced a pressure for producing new types of steel. As of now, India has mainly concentrated on cost reduction. But the pressure from the government has been experienced recently. Now we see the BS 6 automobile is coming into the market. We have to innovate many things. Any high cost solution of the developed countries will not be acceptable for us as we need low cost solutions. Actually, nobody has any broad scale solution to minimise carbon emission. We have to solve it. Even Indians are also facing it now. I believe India will take a leadership in this regard. But it will take time. One can see another important area where India has progressed a lot. India can build airports even better than any other country of the world.
Q. But it is said that we are adopting others’ technology only?
A. There are different stages of technological adaptation. At the first stage, if you learn fast then you can adopt seamlessly from others. Even adaptation is not a very easy task. One example can clarify the matter. In the US, California is famous for its adoption of new technology. But it takes even 30 to 40 years to implement the same in a state like Texas. This is because in the US, each state has its separate prerogatives. The social needs are different for different states
Q. What is the major challenge India will face to be global leader in the steel industry?
A. See there are many challenges and these are discussed in detail elsewhere. But I think that our biggest challenge
is the lack of quality human resource. To have high technology one needs persons of high quality. In Beijing, at the University of Science and Technology, there is a huge steel research division. There, 300 scholars are doing their Ph.D. in iron and steel sector and another 90 scholars are in post-doctoral research. Compare that with India. So, if India wants to produce 300 MT steel and wants to solve the problem of carbon and waste and other problems in industrialisation, we need human resource of quality. We also need proper infrastructure for research in research centres.
Q. It is seen that India has to import high-tech steel products. Why can’t India produce sophisticated steel products?
A. We can produce these if we need them. Now our demand for these products is not very high. Therefore, import serves the purpose. But when demand will be high, we will be able to produce these economically and sustainably. Economies of scale are factors here.