India's steel output has been destined for a big boost. Its production is set to increase to 120 million tons in 2012, which will pose a great challenge to Chinese steel companies, according to the 21st Century Business Herald.

India is one of China's largest suppliers of iron ore. A large expansion of its steel sector would not benefit Chinese steel producers, who are undergoing restructuring.

"The growth in demand for steel products has outpaced supply in India, but I don't believe that Chinese steel companies can have greater opportunities there besides exports," said Tim Dawidowsky, a department head at Siemens Vai Metals Technologies. "Both the Indian government and enterprises hope that they can build factories themselves to meet the growing demand."

In fact, India has always been conservative about foreign investment in steelmaking despite supply shortages. India gave final approval last week to South Korea's POSCO to build a giant $12 mbillion steel plant, the country's biggest foreign investment deal since 1991. POSCO waited six years to get government approval for the project.