Visakhapatnam-Anakapalli Set to Become India’s Largest Steel Manufacturing Hub

Visakhapatnam and surrounding Anakapalli district will be India’s biggest steel-making hub with a combined manufacturing capacity of 25.1 million tonnes per annum (MTPA). Driver for growth is the rejuvenation of the government-owned Visakhapatnam Steel Plant (VSP) and the new large investment by ArcelorMittal Nippon Steel India (AM/NS).

Rashtriya Ispat Nigam Limited (RINL), operator of VSP, has a present capacity of 7.3 MTPA and is contemplating increasing its capacity. AM/NS, on the other hand, would install a 7.3 MTPA plant at Rajayyapeta (Anakapalli district) in the first phase and one additional 10.5 MTPA in the second phase. In case everything goes according to schedule, this would make the region the highest steel-producing district in India.

But a few obstacles still exist. RINL has been struggling with debt and inefficiencies for years. In January 2025, the Centre sanctioned a ₹11,440 crore bailout package to rescue the plant. But this relief is considered insufficient. Options such as leasing captive iron ore mines or merging RINL with Steel Authority of India Limited (SAIL) are being weighed.

Although the Centre has shelved the merger for the time being because of RINL’s financial burdens, ex-SAIL director Kasi Viswanatha Raju maintains that a merger is still the best way ahead. He points out that the PSU has already started reducing costs, cutting contract labor, substituting CISF with the cheaper State’s Special Protection Force, and introducing voluntary retirement schemes.

Analysts contend that the allocation of iron ore mines to RINL, just as AM/NS has been allocated, could reduce raw material costs by ₹5,000–6,000 per tonne, significantly enhancing profitability.

Stakes are high, but all the stakeholders are upbeat. RINL specializes in long steel products, whereas AM/NS will make flat steel having a complementary product base. Such synergy, apart from increasing production, will create more than one lakh employment opportunities. AM/NS is set to invest ₹1.47 lakh crore, and already 2,200 acres of land have been allotted by the state government.

If things come through, Visakhapatnam-Anakapalli will be well on its way to becoming the backbone of India’s steel aspirations.