The Ministry of Steel has just released the Draft National Steel Policy: Vision 2047 with several objectives. These include making Indian steel globally competitive and increasing steel exports to 45 million tonnes (Mt). These are admirable objectives, but they do need clarity on what globally competitive means.

In one sense, the industry has done well. From producing less than 5 per cent of global steel and ranking ninth in 2000, India has become the world’s second-largest steel producer at 170 Mt. Of course, we are very far behind China at 961 Mt.

The steel industry certainly looks good if competitiveness means profitability. The average profitability (EBITDA over sales) for the period 2000-25 was around 15 per cent, which is 3-4 per cent higher than the rest of Indian manufacturing. The profitability of the top three Indian steel firms is also 3-4 percentage points higher than their biggest global counterparts (2015-24). But does this profitability reflect greater efficiency or high protection?…