India’s steel ministry is betting on coastal shipping to increase efficiency in domestic sector.


India’s Steel Ministry has promoted the coastal shipping of steel products in India, terming it as a crucial objective that will significantly reduce logistics costs which in turn will create a more competitive Indian Steel Sector.

The logistics cost of the domestic steel industry currently stands at approximately 18-19 percent of revenue, which towers above the costs of logistics in other steel hubs of the world like China and Europe, both of which have adopted coastal shipping as a solution to reduce costs. 

Using road and rail networks to ferry steel all over the country is not efficient from a logistics and financial standpoint and shifting to coastal shipping will go some way to remedy that, with the ministry’s estimate of a reduction of 70-80% of current costs. The steel ministry believes that continued adoption of coastal shipping will unlock the complete potential of the India’s waterways, while also contributing to a competitive logistics sector.

With major domestic steel industry players taking initiative to match the Indian Steel ministry’s ambitions for coastal shipping, this could be a major catalyst for change in the Indian Steel Sector. With estimated savings of Rs.200-300 per tonne of steel, the resources freed up from the cost of logistics could allow steel firms to focus these savings on other venture. This effort is also expected to tie into India’s Sagarmala programme, which is focused on revamping ports and coastal areas to create economic drivers along the coastline.

With new initiatives designed boost the domestic steel sector, Agni Steels is delighted at the wave of positive change due in the industry.

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