The union cabinet on Wednesday approved a new national steel policy that envisages investment of Rs10 lakh crore in capacity addition and would also make it mandatory for the government to give preference to local manufacturers in procurement.
The National Steel Policy (NSP) 2017 approved by the cabinet chaired by Prime Minister Narendra Modi, enshrines the long term vision of the government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
"The New Steel Policy, 2017 plans to achieve 300mt of steel-making capacity by 2030. This would translate into an additional investment of Rs10 lakh crore by 2030-31," finance minister Arun Jaitley told reporters after the cabinet meeting.
The policy projects crude steel capacity of 300 million tonnes (mt), production of 255 mt (85 per cent capacity) and finished steel per capita consumption of 158 kg by 2030-31 against 61 kg now.
He said the policy hopes to meet the entire demand of high-grade automotive steel, electrical steel, special steels and alloys for strategic applications from local production.
It also plans to increase domestic availability of washed coking coal so as to reduce the dependence on imported coking coal from about 85 per cent to around 65 per cent by 2030-31.
The policy is a step towards steering the industry to achieve its future potential and deals with impediments such as high input cost, availability of raw materials, dependency on imports and financial stress.
The policy of the government and its agencies giving preference to domestically manufactured iron and steel products in procurement is applicable to all government tenders where price bid is yet to be opened.
Key features of the NSP 2017:
- Achieving self-sufficiency in steel production by providing policy support and guidance to private manufacturers, MSME steel producers, CPSEs;
- Encouraging adequate capacity additions;
- Development of globally competitive steel manufacturing capabilities;
- Cost-efficient production;
- Domestic availability of iron ore, coking coal and natural gas;
- Facilitating foreign investment;
- Asset acquisitions of raw materials; and
- Enhancing domestic steel demand.
The policy projects crude steel capacity of 300 million tonnes, production of 255 million tonnes and a robust finished steel per capita consumption of 158kg by 2030-31, as against the current consumption of 61kg. The policy also aims to meet domestically the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85 per cent to around 65 per cent by 2030-31.
The indian steel sector has grown rapidly over the past few years and is the third-largest steel producer globally, contributing to about 2 per cent of the country's GDP. India has also crossed the 100-million tonne- mark in production for sale in 2016-17.