National Steel Policy: Will It Be Able to Meet Expectations?

The government has come up with a new National Steel Policy, 2017 that envisages increasing the capacity of this commodity in the country by more than 2-fold from 122 million tons per annum (mtpa) to 300 mtpa, by 2030. This kind of capacity expansion will require investment to the tune of ₹10 lakh crore.

- Tamajit Pain

The policy comes at a time when India’s crude steel production grew by 7.4 percent in 2016 as it closed in on Japan as the second largest steel producing country in the world. India is tipped to overtake Japan by 2020. The country’s production during the year stood at 95.6 million tons per annum while Japan registered a 0.3 percent decline at 104.8 mt. China remains by far the largest steel producer in the world at 808.4 mt, up 1.2 percent over 2015.

According to figures released by the World Steel Association (WSA), worldwide crude steel production reached 1,628.5 million tons (mt) in 2016, marginally up by 0.8 percent compared to 2015. Production decreased in Europe, the Americas and Africa but was more than offset by increases in the CIS, the Middle East, Asia and Oceania.

India retained its position as the fastest growing major steel economy during the year. Japan, the United States, Russia, Brazil, Germany and South Korea all registered declines during the year. Besides India and China, Turkey and Ukraine were the only countries to register a growth in the list of top 10 steel producing countries.

In the last few years, where the global steel market is concerned, India has provided the only silver lining. While other markets have either stagnated or declined, consumption of steel in India has grown continuously at a steady pace.

In 2016, production was boosted by new capacities coming on stream from government-owned Steel Authority of India Ltd and Tata Steel. The latter began trial production at its Kalinganagar factory in 2016, its first new factory in over a century.