With the Modi government targeting to make India the global manufacturing hub, the foreign investment inflows continue to soar to new highs. Europe-based financial services group Societe Generale has picked up stake leading steel pipes maker Rama Steel Tubes.
As per BSE data, Rama Steel has inked a pact with India's one of largest steel manufacturer JSW Steel for procuring hot rolled coils which is used in manufacturing of steel tubes and pipes.
The development assumes significance as the demand of steel and related products in India, bucking the gloomy global demand, have consistently expanded over the years.
According to industry body Indian Steel Association (ISA), steel demand in India will continue to expand by 8-9 million tonnes. It said that steel demand is expected to be 128.9 million tonnes during 2023-24, up from 119.9 million tonnes during the previous year, boosted by rising demand from the domestic construction, railways and capital goods sectors.
It said that the MoU also establishes Rama Steel an official distributor partner of JSW Steel for distribution of hot rolled coils in the entire western region.
"The MoU brings forth a multitude of competitive advantages as it provides access to top-tier raw materials and also enhances procurement process, ensuring prompt and efficient sourcing, thereby bolstering our supply chain management capabilities," it said in a statement in a SE filing.
According to ISA, the steel sector has benefited from India's strong economic growth and industries such as automotive and consumer durables are expected to fuel steel consumption. India is world's second biggest crude steel producer. The total output increased 4.2 per cent to a record 125.3 million tonnes in 2022-23.
Notably, the government is taking initiatives to increase the manufacturing sector's GDP share to 25 per cent from the existing 16 per cent.