The world’s oldest living city is getting a makeover. Varanasi, Hinduism’s holiest site on the Ganges River in northern India, is one of 100 places earmarked to receive trillions of rupees to transform their aging infrastructure and become ‘Smart Cities,’ replete with affordable housing, improved sanitation, and better transportation.
To build it all, India plans to triple its steel-making capacity, making it the world’s second-biggest producer, trumping Japan, and reviving an industry that a year ago was on its knees.
“India is one of the bright spots for the global steel industry,” said Bijoy Thomas, a senior analyst at India Ratings & Research, the local unit of Fitch Ratings, by phone from New Delhi. “We have a very low base of per-capita consumption and the nation is on the path to development.”
India used about 63 kilograms of steel per person last year, compared with 493 kilograms in China, according to the World Steel Association. That low consumption base, and the promise of a government-backed boom in construction, has prompted a flurry of expansion plans as steel prices recover from a slump in 2015.
India’s biggest producer, JSW Steel Ltd., plans to build two new plants of 10 million tons each in the resource-rich states of Odisha and Jharkhand, and spend billions more expanding its existing mills in an effort to double its size by 2030. Rival Tata Steel Ltd. has sought environmental clearances to expand its two plants in India by 4 million tons a year.
India’s ambitious plans could force the country increasingly to turn to global markets to get enough coking coal and iron ore, Thomas said.
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