Indian Steel Ministry Eyeing Higher Per Capita Consumption

It took India 10 years to raise its per capita steel consumption by 10 kg to 60 Kg at present. Now, the steel ministry is hoping to raise the per capita consumption further by another 10 kg in just three years.

India had consumed 81.52 MnT steel last fiscal, clocking a growth of 5.9% over the previous fiscal. Till April-January period of the current fiscal, consumption grew by 3.5% to stand at 68.89 MnT.

The proposed enhancement of steel consumption would mean another 12.5-13 MnT demand in next three years. A large part of the proposed consumption growth would likely to be fed by the domestic firms as imports, due to levying of the anti-dumping duty, would cone down to the minimal in the coming years.

The ministry has taken a series of initiatives to jack up consumption. It is trying to convince various ministries including rail, urban development and highways on the merits of the use of steel in infrastructure projects. The Budget proposal of according infrastructure status to the affordable housing sector and a 10% growth in allocation to the infrastructure sector will also provide the necessary impetus to the steel consumption growth.

The steel ministry is also propagating the idea of using “swadeshi” steel exclusively for the PSUs and the projects to be funded by the government. This would not only help the domestically-produced steel consumption to grow, it would also further rein in imports of steel. Thus the proposal, which has already been approved by the Prime Minister’s Office (PMO), would be doubly beneficial for the domestic steel firms.

However, to supplement the government’s efforts to boost consumption, the industry needs to gear up to supply quality steel at an affordable rate. While producing the required quantity would not be a problem for the industry, it has to ensure the last mile connectivity to ensure that the commodity reaches up to the doorsteps of the consumers.

At the same time, in order to ensure fully-utilisation of their installed capacity, they will have to continuously look for the exports markets and strengthen it as domestic consumption would fall far short off their cumulative production capacity, now at 120 MnT, is set to go up further in the coming days.

India’s steel consumption :

Source: Joint Plant Committee