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It is estimated that by the end of 2005, China's annual steel output will reach 330 million tons, enough to meet the market demand of 2010.

The state of India's steel industry
The country is the 8th largest crude steel producer in the world. In 2003-04, production of finished carbon steel was 36.957 million tones (mt). Pig iron production in 2003-04 was 3.764 mt.

Effect of Chinese market on India
Over-dependence on the Chinese markets for steel exports may prove to be costly. This is because, like the US, Canada and the EU, there is every possibility that anti-dumping duties could be levied on Indian imports into China too, and the threat of this coming into existence would increase with the slowing down in Chinese consumption of the metal. This could severely hurt realizations of companies, whose significant chunk of revenues come from exports. Earlier last year, China had warned India to keep a curb on its exports to the country or face import barriers. Like the US, exports to China are also capped to 3% of its total steel imports. The steel industry has asked the government to increase customs duty on seconds and defectives to its earlier level of 40% from 20%. The government slashed the duty in the New Year from 40% to 20% to contain inflation, which in turn has adversely affected pricing policies of Indian companies. The industry is also seeking a price-linked duty structure for steel with an upward revision from 5% to 10% of the present duty level and a downward revision of excise from 12% to 8%. According to a leading steel company, complaints are pouring in from Automobile Component Manufacturers Association over cheap imports.

2. IT Sector

From a mere $2 billion in offshore revenues this year, China is expected to pull in $27 billion from IT services (including call-centers and back-office work) by 2007. China is being seen not just as an off-shoring hub, its domestic market is growing too. Chinese companies will spend over $25 billion on information technology this year, and the market is growing at a rapid 30 per cent annually.

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* Contributed by -
Syam Krishna V. K. ,
B.Tech. (Prod. Engg.), Kerala University,
MBA 2007, DOMS, IIT Madras.