Ministry working on a 50-year growth strategy for Steel Sector
New Delhi, Feb 17: Exuding optimism that India’s steel sector would bounce back on the strength of hefty allocations for infrastructure in the 2017-18 budget, Steel Minister Shri Chaudhary Birender Singh today asked the steel industry to ramp up its manufacturing profile to become globally competitive, boost domestic consumption and counter import onslaughts from countries like China and Japan.
“I assure the industry that there won’t be any dearth of demand for steel for the next five decades but Indian steelmakers need to acquire the competitive edge by benchmarking with the best in the world,” he said while inaugurating the ‘Make in Steel Conference” here.
“The ministry is looking for a ’50-year package’ for the steel manufacturers, but the sector needs to be efficient and cost-competitive. We are lagging behind in international benchmarks in productivity and efficiency levels.” he stressed. “We need to think out of the box. We need to enhance consumption of steel in every possible way to avoid overcapacity situation.”
Singling out R&D as a crucial component for steel sector, he said it need not be confused with technology upgradation. “The fact is whatever R&D is being done in a scattered manner; it is isolated; it is token R&D,” he rued.
Listing out the initiatives for the resurgence of steel industry, Shri Birender Singh said his ministry is pitching for 100 per cent quality regime and mandatory BIS certification for all the products. “We are looking for ways which would make usage of domestic steel a precondition in Expressions of Interest (EoIs). Talks are on with different user ministries like Railways, Defence, Urban Development and Roads and Highways for the increased use of steel in their projects and make it mandatory to use domestic steel for all infrastructure and construction projects of the government.”
The minister said India retained its position as the fastest growing steel country in the world in 2016. India is likely to overtake Japan as the second largest producer of steel as the production gap between the two countries has come down from 16 million tonnes to nine million tones.
However, there are certain bottlenecks which need to be addressed for its growth. Dependency on raw materials import, disparity between production and consumption patterns in rural and urban areas of the country and abysmal R&D are impeding the growth of the sector.
The minister said innovative uses of steel in areas like bridge construction, low cost housing in rural areas, sanitation and crash barriers on roads in hilly states can stimulate the demand to a great extent.
The ‘Make in Steel’ conference was organised by KATM, a leading multi-commodity e-commerce platform, with support from Ministry of Steel, JSW Steel, ESSAR Steel, SAIL, MESCO Steel and Arttdinox. Around 300 delegates from 15 countries, including China, Japan, South Korea, Russia and Iran, attended the meet.
In her opening remarks, Steel Secretary Dr. Aruna Sharma said the government has intervened through measures like Minimum Import Price (MIP), anti-dumping duties and safeguard duties to insulate the domestic steel industry against surging poor quality imports and mitigate the impact of the global glut.
“We have now shifted from MIP to anti-dumping duties. The Finance Ministry has reduced the duties on several products. We need to leverage all this to boost domestic consumption which is only 60 kg as compared to China’s 489 kg,” she said.
Dr Sharma said the current year would be very good year for the sector on account of initiatives taken by the government for creating infrastructure and housing-for-all policy in rural and urban areas.
“Consumption is bound to go up as there will be demand boost through mega investment in roads, rail and shipping network, urban development, rural infrastructure, minor and major ports, affordable housing for all and smart cities. The steel industry must ensure steady availability of steel for smooth implementation of the critical infrastructure projects,” she stressed.
The ministry would also give top priority to address the issues of secondary steel makers in the country as these units are set up with low cost and generate maximum employment, she said.
The conference saw industry stalwarts expressing their concerns and challenges confronting the sector. Mr Sheshadri Rao, JMD, JSW, said the steel industry is capital-intensive and cyclic and has to face volatility in prices. “We consume around 85 million tonnes of steel which is abysmally low….The sector needs handholding at all times as is being done abroad,” he added.
SAIL Chairman Mr P K Singh said steel consumption is declining globally, but India needs to take a cue from China, which produces 800 million tonnes of steel, consumes a great part of it and also exports 100 million tonnes. In India the challenge of overcapacity can put increased pressure on us. We need to ward it off.”
MESCO Steel CMD Ms Rita Singh said the target of producing 300 million tonnes of steel, as envisaged in the draft steel policy, would require investment of Rs 14 lakh crores. Also, there are delays by banks in funding of greenfield projects. “We need to address these issues on a priority basis.”
Mr Prashant Ruia, CMD, Essar Group, said imposition of anti-dumping and safeguard duties are in the right direction, but India needs to revisit Free Trade Agreements (FTAs) with China, Japan and South Korea, which is hurting the interest of domestic industry. “Further, on the pattern of ‘Buy American programme’, usage of Indian steel should be made mandatory for all infrastructure projects,” he suggested.
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