National Steel Policy Aims to Make Indian Steel Industries Globally Competitive

National Steel Policy Aims to Make Indian Steel Industries Globally Competitive 

The Minister of Steel and Mines Shri Narendra Singh Tomar in a statement laid on the Table of the Rajya Sabha today informed the House that India is the 3rd largest crude steel producer in the world in 2015 as per provisional rankings released by the World Steel Association (WSA). As per data released by JPC, India’s crude steel production capacity is 109.85 million tonnes in 2014-15 and at 116.74 million tonnes in April-December, 2015-16 (provisional). There has been a growth of 6.5% of Compound Annual Growth Rate (CAGR) in steel production capacity in the country during from the years 2012-13 to 2014-15 and the trend is likely to be continued during the year 2015-16 and increase thereafter. 

In a liberalised and de-regulated economy, the Government’s role is that of a facilitator. As a facilitator, the Government lays down the policy guidelines and establishes institutional mechanism and structure for creating conducive environment for fostering growth in the domestic industry and making it globally competent. The National Steel Policy 2005 lays down broad roadmap for encouraging growth for the Indian steel industry, on both the supply and the demand sides. The long-term goal of the National Steel Policy 2005 is that India should have a modern and efficient steel industry of world standards, catering to diversified steel demand. The focus is, therefore, to achieve global competitiveness. Steel is a de-regulated sector in which investment decision and allocation of funds are made by the investors based on commercial and market considerations and government funds are not allocated for this purpose. 

Jharkhand is an important steel producing state and will continue to show strong growth in this sector in the future. SAIL has a proposal of investing more than Rs.19,000 crore in Jharkhand on modernization of Bokaro Steel Plant, expansion of Gua and Chiria mines etc. Further, Government of India, NMDC (a Central Public Sector Enterprise under Ministry of Steel) and Government of Jharkhand have also signed an Memorandum of Understanding (MoU) to set up a 3 Million Ton Per Annum (MTPA) green field steel plant through a Special Purpose Vehicle (SPV) in Jharkhand at an estimated cost of Rs 18,000 crore. 

Impact of Crisis in the EU and China Steel Market on Domestic Steel Industry 

The Minister of Steel and Mines Shri Narendra Singh Tomar informed the Rajya Sabha today in reply to a question that the global steel industry is going through a severe downturn. Demand slowdown and global overcapacity have resulted in very low international steel prices. Major steel producing countries, particularly China, are adopting a predatory pricing strategy and exporting at prices, apparently lower than its cost of production, in a bid to capture markets like Europe as well as India. This has resulted in declining profitability of steel companies globally as well as for the Indian Steel Industry. 

In order to protect the steel sector and make it more competitive, the Government has taken following measures so far: 

(i) To ensure that only quality steel is produced or imported, Government has notified Steel & Steel Products (Quality Control) Orders, 2012 dated 12.03.2012 and Steel & Steel Products (Quality Control) Orders, 2015 dated 15.12.2015. 

(ii) To increase availability of Coal and Iron ore for the domestic steel industry:- 

(a) Notified the Coal Mines (Special Provisions) Amendment Act, 2015 on 30.03.2015 to streamline coal block allocations. 

(b) Notified the Mines and Minerals (Development and Regulation) Amendment Act, 2015 on 27.03.2015 to streamline grant of Mining Leases. 

(iii) The Union Budget 2015-16 has raised peak rate of basic customs duty on both flat and non-flat steel to 15% from 10%.

(iv) Hiked import duty on ingots & billets, alloy steel (flat & long), stainless steel (long) and non-alloy long products from 5 % to 7.5% and non-alloy and other alloy flat products from 7.5% to 10%. This was further revised in August, 2015 on flat steel from 10% to 12.5%, long steel from 7.5% to 10% and semi-finished steel from 7.5% to 10%. 

(v) In November, 2014, instructions were issued to ensure import of rebars strictly as per Steel Product Quality Control Order 2012, to block influx of cheap imports of boron added rebars. 

(vi) In June, 2015, an Anti-Dumping Duty levied for five years on imports of certain variety of hot-rolled flat products of stainless steel from China ($ 309 per tonne), Korea ($ 180 per tonne) and Malaysia ($ 316 per tonne). 

(vii) Imposed, in September, 2015, a provisional Safeguard Duty of 20% on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, for a period of 200 days. 

(viii) Imposed, vide its notification dated 05.02.2016, the Minimum Import Price (MIP) condition on 173 steel products. Imports of items covered under this notification will not be allowed into the country below the notified price. 

(ix) For reducing the stress in the steel sector, RBI has extended 5:25 scheme in July, 2015, whereby longer amortization period for loans to projects in infrastructure and core industries sectors, say 25 years, based on the economic life or concession period of the project, with periodic re-financing, say every 5 years, is allowed. 

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