ABSTRACT
Demand failure in the Indian steel industry has manifested in the form of consumption of finished steel being persistently lower than that of its production, leading to a situation of excess production, price depression and the wiping off of margins in the steel industry; this has left many a firm debt strapped. This chapter addresses the possible reasons for the failure of demand for steel, namely the infrastructure projects that did not take off, the slowing down of the steel-consuming sectors and the overestimation of demand because the tools were not realistic. It also discusses the extent of overproduction in terms of the product mix of the country. The robust growth of demand in the pre-liberalization 1980s in India gave hope to the policy makers and the business experts that in the post-liberalization period, the demand for steel would grow at least by that much, if not by more.
