Exciting news has recently arrived. POSCO has signed a Joint Venture Agreement (JVA) with JSW Steel, India’s leading steelmaker, to construct an integrated steel mill. Grounded in a robust partnership, this collaboration aims to target high-profit markets in India and further strengthen the global steel supply chain. How did POSCO and JSW Steel come to join hands? Here is the behind-the-scenes story of this monumental partnership.

POSCO Signs Joint Venture Agreement with India’s Leading Steelmaker, JSW Steel

▲ POSCO signed a Joint Venture Agreement with JSW Steel, India’s No. 1 steelmaker, on the 20th to build an integrated steel mill. (From right) Chang In Hwa, CEO of POSCO HOLDINGS; Lee Hee-guen, President of POSCO; Jayant Acharya, CEO of JSW Steel; and Sajjan Jindal, Chairman of JSW Group.

POSCO has officially embarked on constructing an integrated steel mill in India—a high-growth market with a population of 1.46 billion—by signing a Joint Venture Agreement (JVA)* with JSW Steel, the nation’s top steelmaker. The joint venture will be established on an equal partnership basis, with both companies holding a 50% stake each.

The new blast furnace-based integrated steel mill** will feature a comprehensive production system covering both upstream and downstream processes—including ironmaking, steelmaking, hot rolling, and cold rolling/galvanizing—capable of producing high-value-added premium steel. With an annual crude steel capacity of 6 million tons, the plant will be located in the state of Odisha,
securing a site adjacent to iron ore mines with excellent logistics, power, and infrastructure. Construction is projected to take 48 months from groundbreaking, with completion targeted for 2031.

* Joint Venture Agreement (JVA): A form of direct investment where a company partners with local capital to jointly operate and manage a business.
* Integrated Steel Mill: A steel plant equipped with all production stages, including ironmaking (producing molten iron), steelmaking (removing impurities), and rolling (manufacturing finished steel products).

A Perfect Match: How POSCO and JSW Group Share a Common DNA

In India, JSW Group enjoys a level of public recognition and influence comparable to POSCO in Korea, operating across a diverse range of business sectors. Just as POSCO runs professional football clubs like the Pohang Steelers and Jeonnam Dragons, JSW Group boasts immense financial power and cultural influence, even owning the Delhi Capitals, a team in India’s highly popular professional cricket league.

Notably, a special bond forged during a time of crisis connects the two companies. In 2022, Typhoon Hinnamnor caused severe flooding at Pohang Works, submerging key facilities. At that critical juncture, JSW Group generously offered POSCO a set of equipment they had ordered for their own hot rolling mill. This noble gesture significantly expedited the restoration of Pohang’s No. 2 Hot Rolling Mill, serving as a cornerstone for deep mutual trust between the two groups.

▲ (From left) POSCO Founder Park Tae-joon, JSW Group Founder O.P. Jindal (Photo credit: POSCO Group Newsroom DB, Wikimedia)

Beyond a mere business partnership, POSCO and JSW Group share deep-rooted commonalities in their founding spirits and management philosophies. JSW Group’s founder, Om Prakash Jindal (O.P. Jindal), dedicated his life to India’s industrialization. This closely mirrors the philosophy of Jecheol-boguk (제철보국, “Patriotism through Steelmaking”) championed by POSCO’s late founder and Honorary Chairman, Park Tae-joon, which emphasizes serving the nation by producing high-quality steel. O.P. Jindal’s famous vision, “Where others saw walls, he saw doors,” strongly resonates with POSCO’s indomitable “Woo-hyang-woo” (Right-turn) spirit*, which overcame seemingly insurmountable obstacles through sheer determination.

* “Woo-hyang-woo” (Right-turn) Spirit: An indomitable spirit of challenge demonstrated by Honorary Chairman Park Tae-joon during the construction of Pohang Works. He motivated his team by saying, “If we fail to build this steelworks, which is funded by claims-settlement funds from Japan, we must all turn right (‘woo-hyang-woo’) and drown ourselves in the waters of Yeongil Bay,” burning all bridges to ensure success.

Sajjan Jindal, the current Chairman of JSW Group, was deeply inspired during his past visits to POSCO’s Pohang Works and Gwangyang Works, harboring a dream to “build a world-class steelworks like this in India.” In fact, JSW’s flagship Vijayanagar Steelworks was constructed with a layout and neighboring residential complexes remarkably similar to those of POSCO’s works.
Through years of accumulated trust and mutual respect, POSCO and JSW Group have finally joined hands as true partners to pioneer the future of the Indian steel market.

Why India? A High-Growth Market Driven by a Young Population

Why did POSCO choose the Indian market? While there are various reasons—such as a landmass 33 times larger than South Korea and a population exceeding 1.4 billion—the primary driver is the projected surge in steel demand. Growing at a rapid pace of nearly 6% to 7% annually, India is currently recognized as the fastest-growing major economy in the world.

Having surpassed China in population two years ago, India boasts a massive market scale. Notably, the median age of India’s population is exceptionally young at 28. This youthful demographic is a key driver that injects vitality into the consumer market and heightens its future growth potential.

The rising purchasing power of India’s younger generation is driving development across various industries. The automotive sector, in particular, is expanding rapidly. Currently ranking fourth globally in vehicle production, India’s automotive industry is growing so fast that it is expected to climb to third place in the near future. Additionally, the home appliance market—where Korean giants like Samsung and LG have a strong presence—is seeing increased demand due to rising income levels. In the construction sector, active development of new smart cities is also driving a steady increase in steel consumption.

Specifically, India’s steel demand, which stood at 90 million tons in 2015, has surged to 150 million tons in 2024, and is projected to reach 260 million tons by 2035. Today, India stands as the world’s largest steel market, second only to China.

Supporting this explosive demand is India’s abundance of natural resources. India ranks seventh globally in iron ore reserves (approximately 35 billion tons) and possesses rich reserves of coking coal, offering a significant advantage in raw material procurement. This resource wealth serves as a powerful springboard for India to achieve complete self-sufficiency in the steel industry and sustain long-term growth.

To Go Far, Go Together: Why POSCO and JSW Steel Joined Forces

Why did POSCO choose to enter India through a Joint Venture (JV)? Since 2004, POSCO had explored entering India’s upstream steelmaking sector on four separate occasions. However, these attempts faced hurdles, such as finding the right partner and securing land. The Indian market proved highly challenging for foreign enterprises to navigate independently. Drawing from these experiences, POSCO concluded that partnering with a strong local player was the most viable path forward.

In this regard, JSW Steel, India’s top steelmaker, was the perfect partner. JSW Steel has demonstrated remarkable growth in a short span, scaling its crude steel production from 2.2 million tons in 2005 to over 30 million tons today.

The foundation of any joint venture is trust. Reflecting this, the joint venture is structured as an equal partnership with a 50:50 shareholding split. This structure embodies a shared commitment to building the world’s finest steel mill by combining POSCO’s world-class technology with JSW Steel’s market leadership and local execution capabilities.

Amid rising global protectionism, the Indian government has also tightened measures to protect its domestic market. To safeguard its local steel industry, India has strengthened regulations on domestic production and mandated standard certifications for imported steel. Under these circumstances, the decision to form a joint venture with JSW Steel represents a proactive, strategic move to successfully navigate and establish a strong foothold in the Indian market.

There is an African proverb that says, “If you want to go fast, go alone; if you want to go far, go together.” In line with this wisdom, POSCO plans to combine its innovative steelmaking technology with JSW Group’s formidable local competitiveness, paving the way to make substantial contributions to the industrial development and economic growth of both nations.

Prime Minister Modi revamped India’s economy with his “Make in India” initiative. (Source: LinkedIn)

Most notably, Prime Minister Modi launched the “Make in India” initiative in September 2014, showing his resolve to revamp the manufacturing industry in India. Under the initiative, domestic as well as foreign companies are encouraged to manufacture their goods in India with the goal of increasing the makeup of the manufacturing industry to 25 percent of GDP by 2025.

At the heart of the initiative is the government’s efforts to ignite the steel industry. The National Steel Policy (NSP) 2017 declared that India will become self-sufficient on domestic steel supplies by increasing its steel production capacity from 122 Mt in 2015 to 300 Mt in 2030. However, the steel industry currently only makes up 1.04 percent of the country’s GDP.

Challenges Ahead for India’s Steel Industry

Despite India’s promising potential and robust government support, the steel industry has not met the government’s high expectations and growth has been modest. According to researchers in volume 4 of the Asian Steel Watch, there are deep structural flaws within India’s steel industry that need to be addressed before the country can reach its full potential.

One of the industry’s biggest challenges is its growing debt – In 2016, the steel industry surpassed INR 3 trillion in debt. Most of the country’s steel and infrastructure projects are financed by the government. What India needs is more private sector involvement, but private players are hesitant due to complex regulations, a lack of business models and no guarantee on returns on investment (ROI). The government has also been slow to secure FDI because, over the years, India’s steel industry has displayed poor planning and management of projects as well as a mismanagement of funds.

India’s mining industry will directly affect the success of the steel industry. (Source: Pinterest)

Another major challenge has to do with India’s natural resource management, as mining companies do not have fair access to the country’s abundant resources. The mining industry is subject to heavy tax burdens including the royalty, local area development tax, forest development tax and much more as it is a profitable business for the government. Plus, the costs of meeting international environmental standards are passed directly onto mining companies. Thus, the price of iron ore and other minerals do not reflect the abundant supplies available, and the higher prices ripple into the steel industry.

Moreover, the government regards the steel industry as the backbone of India’s economy, but in reality, the times are changing.

Technological advances in the manufacturing industry is making the steel production process more efficient and less labor intensive. (Source: South China Morning Post)

In the past, 70,000 workers were required to produce 1.5 Mt of steel. Today, it takes about 3,000-4,000 workers to make 5 Mt a year. The steel industry is just not what it used to be in terms of the positive effects it had on the economy as a whole. The industry requires intensive capital and the only way it will survive is with low labor costs and maximum manpower productivity.

India needs to take full advantage of the country’s abundant resources and capitalize on its competitiveness to reach its full potential. In order to do so, India can start by examining other steel industries that served as the main driver for national economic growth, such as Korea’s.

Takeaways from Korea

After the Korean war in 1953, Korea had to build its economy up from scratch. Like India, the government chose to stimulate its steel industry and spent its war reparations payment from Japan to build POSCO’s steel mill in 1969. Since then, the state-led steelmaker has been a primary engine for Korea’s miraculous economic growth.

The construction of POSCO’s headquarters began in May 1968.

So how did Korea manage such growth?

The government allocated much of its resources to infrastructure construction for efficient logistics and implemented policies to support the mutual growth of steel and steel-consuming industries. Moreover, the government practiced protectionist trade policies long enough to get Korea’s steel business on its feet, then supported a market-driven business model.

The government also kept a close watch on supply and demand forecasts and updated its supply policies timely and accordingly. Factors such as demographic changes, industrialization patterns, urbanization and labor costs should be examined holistically to prevent the gap between supply and demand from increasing too much. For example, in 2010, the Korean government implemented capacity expansion policies that resulted in oversupply and a prolonged recession. This was because policymakers failed to diagnose the symptoms of the mid to long-term steel demand forecasts that showed sluggish demand. Since then, Korean policymakers keep close watch on such measures to update the country’s supply policies.

Finally, the Korean steel industry invested heavily in knowledge accumulation and R&D to wean off of Japan’s technical support and become an exporter of steel technology.

POSCO is now a leader in steel production technology.

Compared to Korea, India has an advantage in almost every aspect. The country’s per capita steel consumption is still low and the booming population will drive demand in steel-related industries. With much room for growth, the Indian steel industry can expect to see accelerated growth when paired with the right policies and government support.