Steel sector Current Affairs

Union Cabinet Clears New National Steel Policy

The Union Cabinet has given its approval for National Steel Policy (NSP) 2017 to give impetus to the steel sector. The policy aims to enhance domestic steel consumption and transform Indian steel industry into a technologically advanced and globally competitive steel industry. The new policy favours the domestic manufacturers.

Key features

  • Policy aims to create self-sufficiency in steel production by providing policy support and guidance to private manufacturers, MSME steel producers, CPSEs
  • Encourages adequate capacity additions and promote the development of globally competitive steel manufacturing capabilities.
  • Facilitates foreign investment and aims to enhance the domestic steel demand.
  • Promote cost-efficient production.
  • Aims to ensure the domestic availability of iron ore, coking coal & natural gas and other raw materials at competitive prices.

Salient Highlights

  • The policy envisages the achievement of crude steel capacity of 300 million tonnes (MT), production of 255 million tonnes (MT) and a robust finished steel per capita consumption of 158 Kgs by 2030 – 31. At present the current consumption is 61kgs.
  • The policy aims to meet the entire demand of high-grade automotive steel, electrical steel, special steels and alloys for strategic applications through adequate local production.
  • It aims to increase domestic availability of washed coking coal in order to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
  • All the government tenders would give preference to domestically manufactured iron and steel products. The domestic manufacturers who import raw materials or intermediate products will be able to claim the benefits of the domestic procurement provision if they add a minimum of 15% value to the product.
  • R&D in the steel sector would be carried out through the establishment of Steel Research and Technology Mission of India (SRTMI).

Background

India is the third largest producer of steel globally. The steel sector is contributing to about 2% of the country’s GDP.  India had produced 100 Million Tonnes (MT) of steel in 2016-17. Though the National Steel Policy 2005 charted out a roadmap for the sustained and efficient growth of the Indian steel industry, the recent changes in the economic order calls for a new national policy.

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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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