[Asian Steel Watch] Vol.4 (2017.12)
On the Cover Can India Become the Next China?
With India’s economic growth rate exceeding that of China in 2016, many people wonder if India can manage to become the next China. A comparison of the two countries should be able to determine if India’s steel industry can match that of China’s. Comparing the ratio of gross fixed capital formation to GDP, contribution of secondary industry to GDP, and urbanization rate of India and China, the gap between the two countries is significant and is less likely to narrow profoundly.
Economic and social characteristics in India hamper high steel demand growth: strict labor laws and practices, the lack of infrastructure, high interest rates, insufficient public financial support, and complex issues related with securing land. India has surpassed China in terms of economic growth. However, its economic development has mainly been propelled by the service sector, and India’s steel-consuming industries, such as manufacturing and construction, are relatively weaker than those of China.