Steel sector Current Affairs

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Draft steel policy anticipates Rs. 10 lakh crore investments

The Steel Ministry has released new draft National Steel Policy of 2017, envisaging to double India’s domestic steel production capacity to 300 million tonnes by 2030-31.

The draft policy anticipates a requirement of Rs. 10 lakh crore of fresh investments to meet production goal and expects creation of at least 11 lakh new jobs in the process.

Key Features of Policy
  • Two alternatives vision: (i) Create a globally competitive steel industry that promotes inter-sectoral growth (ii) Create a self-sufficient steel industry that is technologically advanced, globally competitive and promotes inclusive growth.
  • Focuses on: Impediments like high input costs, import dependency, availability of raw materials and financial stress plaguing the sector. Couple of factors such as the demand and production of sponge iron are still under discussion.
  • Gas-based steel plants: Proposes gas-based steel plants and technologies such as electric furnaces to bring down use of coking coal in blast furnaces in order to cut down reliance on expensive imports of coking coal.
  • Public sector firms in the steel sector: They should aim for economies of scale. The will be encouraged to divest their non-core assets through mergers and restructuring.
  • Greenfield steel plants along India’s coastline: These plants will be set up under the aegis of Sagarmala project to tap cheap imported raw materials such as coking coal and export the output in a more cost-effective manner.
  • Cluster-based approach: It will be pursued, especially for micro, small and medium enterprises (MSMEs) to ensure easy availability of raw materials, optimum land use and economies of scale.

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Steel Ministry to set up of Steel Research & Technology Mission of India

Ministry of Steel is planning to set up Steel Research & Technology Mission of India (SRTMI) to facilitate joint collaborative research projects in the iron and steel sector in India.

The conceptualization of SRTMI was done by a high level task force set up by the Union Ministry of Steel.

Key Facts

  • SRTMI has been setup as a Registered Society wherein the Union Ministry of Steel is a facilitator. It is an industry driven institutional initiative.
  • It will be governed and administered by a Governing Body comprising the CEOs of steel companies, domain experts and a representative from Union Ministry of Steel.
  • The Director of SRTMI will carry out the executive functioning who will be assisted by appropriate supporting structure.
  • Initial corpus for setting up of SRTMI is. 200 crore rupees. Union Ministry of Steel will provide 50% of corpus and the balance will be provided by participating steel companies.

Significance

The SRTMI is likely to enhance the R&D investments in the iron and steel industry to the international levels. The R&D investment of the leading steel companies in India in terms of percentage of their turnover is very low and ranges from 0.05 to 0.5% vis-à-vis upto 1%. Some of the steel companies also have formulated R&D masterplans to increase their expenditure in R&D to 1% of their turnover to meet international levels.

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Union Government imposes safeguard duty on import of steel products

The Union Finance Minister has extended the safeguard duty on import of some steel products by two years i.e till March 2018.

In this regard, the Central Board of Excise and Customs (CBEC) has issued a notification mentioning that safeguard duty will be reduced to 10% in stages till 2008 from current 20%.

The safeguard duty will be imposed on steel products hot-rolled flat products of non-alloy and other alloy steel in coils of 600 mm width.

The duty will be on the products which are imported at or above the minimum import price (MIP), which helps to set a floor price mainly to discourage imports below this price.

The main intention of this move is to protect domestic industry from onslaught of cheap steel supplies (imports) from China amid a global glut.

What is Safeguard Duty?

  • The safeguard duty is tariff barrier imposed by government on the commodities to ensure that imports in excessive quantities do not harm the domestic industry.
  • It is mainly temporary measure undertaken by government in defence of the domestic industry which is harmed or has potential threat getting hared due to sudden cheap surge in imports.

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