Home World Economy New steel policy targets Rs 10 lakh crore investment: Government

New steel policy targets Rs 10 lakh crore investment: Government

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KOLKATA: The Union Cabinet on Wednesday approved a new steel policy that envisions investment of Rs 10 lakh crore to build more production capacity .

The policy has planned for a steel demand of about 230 million tonne by 2030-31. It mandates to “give preference to domestically manufactured iron & steel products (DMI&SP) and will be applicable on all government tenders where price bid is yet to be opened,” said a statement issued late on Wednesday.

DMI&SP policy provides a minimum value addition of 15 per cent in notified steel products that are covered under preferential procurement. A major part of that new steel demand is expected to come from affordable housing, expansion of railway networks, development of domestic shipbuilding industry, opening up of defence sector for private participation and an anticipated growth in automobiles.

The policy envisages a crude steel capacity of nearly 300 mt by 2030-31, which is similar to the earlier target set by the earlier National Steel Policy, 2005. India is tipped to emerge as the 2nd largest steel producer globally, had a production level of 91mt and a domestic steel capacity of 122 mt in 2015-16.

Commenting on the cabinet nod, Jayant Acharya director (commercial & marketing ), JSW Steel said: “It is a very positive step. It comes at a time when the industry is facing turbulence. In a shift away from earlier policies, it not only sets a directional roadmap by setting 160 kg per capita steel consumption as a clear target but also puts in place a policy on how to achieve it, produce new products and access key raw materials.”

The policy would rely on local producers to provide self-certification to the procuring government agency declaring that steel products are domestically manufactured in terms of local value addition prescribed.

“Significantly, it also talks about preference for domestic steel for local projects,” Acharya added. “In the US, there is a similar policy of Buy American. India is at an inflection point vis-a-vis its infrastructure and manufacturing sectors. This policy will hopefully spearhead not only steel sector but also the economy at large,” he remarked.

New steel policy targets Rs 10 lakh crore investment: Government

The National Steel Policy 2017 is an effort to steer the industry— both large and MSME segments — to achieve its full potential, enhance steel production with a focus on high-end value added steel while being globally competitive.

In particular, India needs to make a special effort to domestically produce for high-end applications, electrical steel (CRGO), special steel and alloys for power equipment, aerospace, defence and nuclear applications, the policy added.

The government said it felt the need to replace elements of NSP 2005 with a new policy, mainly due to major changes in demand and supply, both within India and globally. As per the policy, per capita, Steel consumption is poised to go up to 160 kg by 2030-31 from the present level of around 61 kg. Incidentally, global average per capita steel consumption is way ahead at 208 kg.

The new policy has also set an aim for India to become a net exporter of steel by 2025-26. On the raw material front, the policy aims to increase supply of domestic coking coal, a key steel-making input to cut dependence on imports by half.

India currently imports around 70 per cent of coking coal requirement. It aims at raising the availability of washed coking coal to reduce import dependence on coking coal by 50 per cent by 2030-31.

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