Steel Industry
The iron and steel industry is one of the most important industries in India. During 2014 through 2015, India was the third largest producer of raw steel and the largest producer of sponge iron in the world. The industry produced 91.46 million tons of total finished steel and 9.7 million tons of pig iron. Most iron and steel in India is produced from iron ore. The Indian Ministry of Steel is concerned with: the coordination and planning of the growth and development of the iron and steel industry in the country, both in the public and private sectors; formulation of policies with respect to production, pricing, distribution, import and export of iron and steel, ferro alloys and refractories; and the development of input industries relating to iron ore, manganese ore, chrome ore and refractories etc., required mainly by the steel industry.
Structure
The iron and steel industry in India is organised into three categories: main producers, other major producers, and secondary producers. In 2004-05, the main producers i.e. SAIL, TISCO and RINL had a combined capacity of around 50{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} of India’s total steel production capacity and production. The other major producers — ESSAR, ISPAT and JVSL — account for around 20{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} of the total steel production capacity.
National steel policy
National steel policy – 2005 has the long-term goal of having a modern and efficient steel industry of world standards in India. The focus is to achieve global competitiveness not only in terms of cost, quality, and product-mix but also in terms of global benchmarks of efficiency and productivity. The Policy aims to achieve over 100 million metric tonnes of steel per year by 2019-20 from the 2004-05 level of 38 mt. This implies an annual growth of around 7.3{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per year from 2004-5 onward.
The strategic goal above is justified because steel consumption in the world, around 1000 million metric tonnes in 2004, is expected to grow at 3.0{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per annum to reach 1,395 million metric tonnes in 2015, compared to 2{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per annum in the past fifteen years. China will continue to have a dominant share of the demand for world steel. Domestically, the growth rate of steel production over the past fifteen years was 7.0{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per annum. The projected growth rate of 7.3{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per annum in India compares well with the projected national income growth rate of 7-8{c909ba32dd49e2347b9da76d2471d15615fb19a50a31d6362bb7d8ae14133d26} per annum, given an income elasticity of steel consumption of around 1.
Subsequent steel policies have been drafted each year. The Indian Ministry of Steel has released draft National Steel Policy (NSP), 2017. The problems identified in this sector include:
* Steel companies are plagued with huge debts
* Lack of domestic demand.
* Low quality of metallurgical coke for blast furnace iron making.
* High input costs.
* Cheap imports from China, Korea and other countries are also a matter of concern for domestic producers.
The aim of the draft NSP is to develop a self-sufficient steel industry that is globally competitive. The policy proposes setting up Greenfield Steel Plants along the Indian coastline under the Sagarmala Project. This has been proposed in order to tap cheap imported raw materials such as coking coal and export the output without incurring huge cost burden. The policy has also proposed the idea of gas-based steel plants and use of electric furnaces in order to bring down the use of coking coal in blast furnaces. The policy targets to achieve production of 300 million tonnes by 2030-31.