New steel policy to make steel industry competitive: PM
- Author: Salvatore Jensen May 04, 2017,
May 04, 2017, 21:37
He expected this policy to boost FDI in steel sector as foreign companies would consider setting up plants in India.
The Union Cabinet chaired by Prime Minister Narendra Modi gave its approval to the NSP 2017 that seeks to increase per capita steel consumption to 160 kg by 2030 from the existing level of around 60 kg.
Mumbai: The cabinet late on Wednesday cleared a policy for the domestic steel sector which plans to treble India's steel production capacity by 2030 and help the country meet its steel requirements.
The New Steel Policy, 2017 aspires to achieve 300MT of steel-making capacity by 2030. In February 2016, it introduced minimum import duty (MIP) on certain steel products for about a year to protect the domestic industry from cheaper imports. The list and the value may be reviewed by the ministry for flexibility.
"I am confident that the policy will make the Indian steel sector more vibrant and competitive, and facilitate taking the steel industry to new heights of success", the minister added.
"Majority of steel capacity is owned by private sector which is under pressure with respect to profitability (given the global overcapacity we do not expect significant improvement in near to medium term; though anti-dumping duty would protect Indian mills' profitability to certain extent) thus, until things improve, major capex from them looks unlikely", the note said.
The Policy has adopted a comprehensive approach looking into key drivers that can boost steel sector such as, the abundant supply of raw materials including coking coal and iron ore.
There are provisions in the policy for waivers to all such procurements, where specific grades of steel are not manufactured in the country, or the quantities as per the demand of the project can not be met through domestic sources. The initiative is aimed to spearhead R&D of national importance in iron & steel sector utilizing tripartite synergy amongst industry, national R&D laboratories and academic institutes.
A steel ministry spokesman was not immediately available to respond to telephone calls from Reuters seeking comment. It shall be the responsibility of every government agency to ensure implementation of the policy. In few cases, the onus of demonstrating the correctness-of the same shall be on the bidder when asked to do so. The priority will be given to domestic steelmakers in government tenders for infrastructure projects.