India’s Metal Exports Leverage Competitive Advantage in Global Trade

10 November 2023

The continuing expansion of the Indian economy and the government’s emphasis on infrastructure development have increased production and consumption of key metals including iron and steel, aluminium, copper, zinc, and bauxite. Metals are essential building blocks that are used in building infrastructure of a country. India has a significant advantage where it concerns the metal and mining sector. Blessed with an abundance of natural reserves, India has a rich variety of mineral deposits that serve as core ingredients in the production of key metals.

According to a report, India is the second-largest producer of crude steel in the world, with production levels reaching 124.7 MT in 2022. The trends in India’s metal industry also pave the way to capture a larger share of the global demand. In this blog, we will discuss India’s exports of key metals, namely iron & steel, aluminium, copper, and zinc.

India’s Exports of Key Metals in 2023

When it comes to key metal exports, the indigenous availability of primary production metals such as iron ore, bauxite, zinc and non-coking coal gives India a competitive advantage. India’s key metal exports (iron & steel, aluminium, copper & zinc) together totalled USD 12,225 million in the first half of 2023. The country shipped iron and steel the most, followed by aluminium & articles, copper & articles, and zinc & articles. Take a look at the chart to analyse month-wise values of key metals exported from Jan to Jun 2023.

****Value USD Million

India’s Exports of Key Metals in 2022

Over the past few years, India’s iron and steel exports have shown steady trends, reaching a peak value of USD 21,199 million in 2021. Although slumping in 2022 to USD 15,198 million, owing to the imposition of export duty and weakening global demand. The value of exports remained higher than the pre-pandemic levels, underlining India’s growing potential. Similarly, India also exports aluminium, copper and zinc to the world amid increasing demand. Here is a chart showing India’s exports of iron & steel, aluminium & articles, copper & articles and zinc & articles recorded in 2021 and 2022.

India’s Exports of Key Metals by Destination Country 2022

India’s top export destinations of iron and steel in 2022 were Italy (USD 1,673 million), United Arab Emirates (USD 1,305 million), United States of America (USD 1,013 million), Nepal (USD 981 million) and Türkiye (USD 928 million).

India’s majorly exported aluminium and articles in 2022 to United States of America (USD 1,223 million), South Korea (USD 1,166 million), Netherlands (USD 927 million), Malaysia (USD 597 million) and Mexico (USD 504 million).

China (USD 541 million), United States of America (USD 334 million), Saudi Arabia (USD 117 million), United Arab Emirates (USD 67 million) and Germany (USD 60 million) were India’s top export destinations of copper and articles in 2022.

In addition, Singapore (USD 296 million), United Arab Emirates (USD 195 million), Taipei, Chinese (USD 130 million), Indonesia (USD 129 million) and Malaysia (USD 107 million) were India’s major export destinations of zinc and articles in 2022. The values in percentage of all these countries are shown in the given chart.

India’s Step Towards Being Globally Competitive in Metal Industry

The global demand of key metals including iron & steel, aluminium, copper, and zinc is rising. For instance, market research shows that the demand of steel worldwide is expected to grow by more than a third till 2050. With countries favouring policies to strengthen raw material supply chains, India has a good opportunity to increase its global supply of these metals. Trade agreements between India and other countries can be one more way of maximizing metal exports.

While Indian producers can tap on these potential markets, there are certain challenges that need to be addressed to export more metals to the world.

                          ·       Raw Material Supply Instability

Ensuring supply chain stability of key raw materials used in the production cycle of metals is critical for any country aiming to be globally competitive. So, India needs to produce raw materials and reduce import dependency on other countries.

                          ·       Logistics Complexities

Managing logistics is a complex challenge in India be it ensuring regular transportation of bulk raw materials such as transportation of finished products, or mineral ores & coal. With the introduction of the National Logistics Policy (NLP), India’s transportation woes should improve with logistics costs.

                           ·       Decarbonization Challenge

Global trading mechanisms are changing given the stronger push for sustainability. Decarbonization becomes a priority and industry stakeholders, along with the government need to take active measures to decarbonize this energy-intensive sector.

So, while India has been having better export performance in the last few years, addressing these challenges will further expand the country’s export basket and increase the contribution of the metal segment.