Initiative to promote a competitive, efficient, and environmentally friendly steel industry
The steel industry is one of the most essential pillars of industrial development in India. The dynamic domestic steel industry provides inputs across major sectors including construction, infrastructure, defence, rail, automotive, capital goods, etc.
From a capacity of 1 million tonnes (MT) at the time of independence, India’s crude steel capacity has ascended to 142 million tonnes (MT) at the present moment and India is accomplished as the world’s second-largest producer of steel. In order to strengthen the robust industry, various steps are being taken to date to boost indigenous steel production and encourage the domestic steel industry.
‘Make In Steel’: India towards $5 Trillion Economy
Steel has several inherent advantages including the creation of a circular economy. It has a multiplicative effect on the economy stemming from both direct and associated effects on the supply chain and consumption industries. With catchy 'Make in Steel', the Ministry of Steel has initiated various projects in order to achieve the vision of making a robust steel industry. India is ushering towards a $5 trillion economy and the steel industry will play a pivotal role in achieving the goal.
National Steel Policy (2017): NSP, launched in 2017, laid key imperatives to service the growing requirements of modern India. This policy also envisages meeting the demand for steel domestically. In an effort to steer the industry to achieve its full potential, this initiative is taken to produce high-grade steel for strategic applications.
Domestically Manufactured Iron & Steel Products Policy (DMI&SP): Launched in 2018 and revised in 2019, this policy mandates to provide preference to Domestically Manufactured Iron & Steel Products (DMI&SP) with a minimum of 15%-50% value addition in Government Procurement.
Steel scrap policy: Due to its recyclable nature and faster-associated completion times, Steel is environmentally sustainable. This policy mandates the processing and recycling of products in an organized, safe, and environment-friendly manner. To minimize the dependency on imports, this policy aims to produce high-quality ferrous scrap for quality steel production.
Steel Import Monitoring System (SIMS) - An institutional mechanism for steel import monitoring has been introduced which would be a completely online system for advance registration for intended imports of steel. This information would be useful to the Indian domestic steel industry in responding to market conditions in a dynamic manner.
Steel will play a crucial role in India’s ascent to a $5 Trillion economy. The Indian steel industry prompts a vibrant ecosystem that will ensure tangible outcomes of other related sectors. Additionally, the secondary steel sector in India currently contributes over 40% of the total capacity.
Impact of COVID on steel industry & path to recovery
The Covid-19 pandemic has severely affected economies and industries across the world and the steel industry is no exception. Constraints in the supply-side due to lockdown and shortage of workforce led to weak domestic demand which caused prices to stay low.
But, in recent times, the export of finished steel has seen a huge jump due to a significant increase in exports to other countries. The consumption rise registered as of July 2020, accounts for 5.6 million tonnes. According to the World Steel Association, as of January 2021, India registered a significant growth of 7.6% in crude steel production at 10 million tonnes (MT).