In a recent media interaction, Steel Secretary of India, Ms. Aruna Sharma gave key highlights of what did Indian steel sector achieved in past four years and how the National Steel Policy (NSP) that was announced in May 2017 is benefiting the country’s domestic steel industry.
India became a net steel exporter
In FY17, India became the net exporter of steel with significant export of 8.2 MnT registering 102% growth over previous fiscal. In time span of four years, the country’s steel exports rose from 5.6 MnT in FY15 to 9.6 MnT in FY18. On the other hand, India’s steel imports declined by 36% in times span of three years from a level of 11.7 MnT in FY16 to 7.5 MnT in FY18.
Indian steel sector has been growing at a compounded annual growth rate (CAGR) of about 5% over the past four years on account of improvement in the overall capacity utilisation.
India’s steel production capacity has increased from 110 MnT in FY14-15 to 134 MnT in FY17-18, while 7 MnT was added in 2017 alone. With the ambitious National Steel Policy (NSP) announced, the steel ministry has set a target of raising India’s steel production capacity to 300 MnT by 2030 and production target of 250 MnT of crude steel.
Aruna Sharma has added that at the current pace and outlook of the industry, country’s steel-making capacity is expected to reach 150 MT mark by 2020.
In a global map, India stood at third position in terms of crude steel output with crude steel production of 101.4 MnT, an increase of 6.2% y-o-y basis giving close fight to world’s second largest steel producing country Japan which produced 104.2 MnT of crude steel in 2017.
The gains from implementation of NSP
The NSP which was launched in May 2017 aims to create self-sufficient steel industry that is technologically advanced, globally competitive and promotes inclusive growth.
Aruna Sharma said that the rollout of NSP has helped to save a forex of INR 5,000 crore since last year. A number of PSUs including Steel Authority of India Ltd (SAIL) turned profitable. Prime Minister Narendra Modi has also inaugurated a steel processing unit of SAIL in Kandrori near Bilaspur, Himachal Pradesh in October last year where high-end special steel TMT bars will be produced.
In terms of supply of raw materials like coking coal, iron ore etc, the secretary said there will not be any scarcity of raw material for the producers.
The new steel policy, she said, envisages to meet the entire demand of high-end 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% to 65%. The policy also aims at generating additional employment for 36 lakh people directly or indirectly.
Owing to the enabling steps taken by the government, India’s per capita steel consumption has increased from 59 kg in 2014 to 69 kg (provisional figure) on date and NSP aims to increase the per capita steel consumption to 160 kg by 2030.
The issue of NPAs in Indian steel sector got addressed
On the efforts taken by the government for Indian steel sector that was struggling with tepid growth rate, Ms. Aruna Sharma added that the industry was facing a tough time as it was not growing at the pace it should have been. As the new government was working towards the progress of the sector, the issue of NPAs (non-performing asset) came up. NPAs in the steel sector reached to their peak of Rs 1.15 lakh crore which was about 30% of the total industry NPAs in March 2016.
However, it was good also that the problem was identified and so steps were taken to resolve it. Once the cases get resolved, the plants will give their full contribution, she said. As the steel sector has been performing well for the last two years, bidding for the stressed assets under NCLT process is heading towards a positive resolution.
The problem of cheap steel dumping was fixed
The dumping of cheap steel items was another troubling issue, she said. Sharma said the ministry imposed trade remedial measures and brought in quality control order. Imposition of minimum import price, anti-dumping duties, safeguard duty and countervailing duty resulted in curbing unabated exports and unfair trade practices like predatory pricing by other countries.
In order to decrease import and making of substandard steel items in India and to provide a level playing to small players vis-a-vis bigger players, more than 80% steel products have been brought under quality control orders by notifying 37 steel and steel products under BIS Act,” she said.
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