Editorial – September 2023
When the global economy was trying to stabilize after covid pandemic, the Russia – Ukraine war erupted and many countries got affected. The international trade got disrupted as these two countries were war bound and also many trade routes were non operational due to the war. Ukraine used to contribute steel semies and also few minerals to the international trade. Russia also was a major exporter of steel semies and also finished steel, All this came to a halt due to this unfortunate war Now it is more than a year and the war is still going on with no signs of stopping but the good part is that the industry has adjusted itself, developed new supply chains and moved ahead. We wrote in our last month’s column that the industry has learnt to live with the ongoing war. As the industry was trying to come out of the Russia-Ukraine war, another war erupted. The whole world was stunned by the sudden rocket attack by Hamas on Israel What is getting unfolded after this is a long chain of undesired events for everybody in the world. So many innocent civilians including ladies and children getting killed is a big blot on humanity.
One can observe in case of both these wars, even though there are only two countries or the sides in the front fighting against each other, there are many countries supporting either side and thus participating indirectly in the war. From the industry perspective, a lot of resources of many countries are getting diverted towards the war and to that extent, the developmental work gets the backseat. I will not be surprised if the economies of not only these war bound countries but of many other countries in the vicinity would get affected. Since the last few months, experts were debating a possibility of a global recession. I think that process may now get accelerated.
What will happen to India? Before finding the answer to this question, let me remind you of the situation in 2008. With the debacle of Lehman Brothers, the global financial meltdown was triggered. Most of the developed world economies had a steep fall and India was seen as the only growing economy in those challenging times. That was the moment when India caught the attention of the international industry as well as the investing community and the ‘Great Indian Growth Story began in real terms. With these two wars mentioned above, many countries will suffer economically and again the world economy will be in doldrum, India is already the fastest growing large economy today and can surely consolidate its position further amid these tarbulant times Of course, most of the factors in this game lle outside the industry preview and fall in the area of geopolitics.
In any case, the next few months are going to be very crucial and it will be interesting to watch the future unfolding. My wishful thinking is that the steel industry will be a net gainer!