India is the sole big economy with a double-digit spurt in the consumption of steel as high as 13.5 per cent during the first half of 2024-25. A statement issued by the Ministry of Steel on Wednesday quoted a senior official who explained: "Even assuming very low demand growth at about 10 per cent, this country will need a 300 million tonnes of capacity to meet about 265 million tonnes of demand in 2030.
According to the statement, unless adequate domestic steel production capacity is built, the country would become a net importer of steel and would remain dependent on imports of steel for its infrastructure creation. As per the National Steel Policy, it aims for a production capacity of 300 million tonnes of steel by the year 2030 with the present capacity being about 180 million tonnes.
This translates into an additional capacity creation of 120 million tonnes, equivalent to an investment of estimated $120 billion or over Rs 10 lakh crore.
This is possible only if the steel industry, both large and small, has adequate capital investment capacity and low steel prices, due to dumping of steel in the international market, will adversely impact the capacity creation objective of the country, the statement said.
India's steel imports have risen sharply for the first half of 2024-25 compared to the same period last year.
Whereas the steel imports for the first half of 2023-24 were 3.32 million tonnes, the imports have risen to 4.73 million tonnes this year, up by 41.3 per cent.
While the overall volume of steel imports, as compared to total consumption in the country, is not significant, cheaper imports lead to depression of domestic steel prices and affect steel producers, both large and small, the statement explained.
As per the statement, out of the 144.30 million tonnes of steel produced in the country during 2023-24, 58.93 million tonnes (40.84 per cent) was produced by over 1002 small producers, and 85.37 million tonnes (59.16 per cent) was produced by the integrated steel producers.
Thus, it is evident that the massive production in the steel industry is by small producers spread over numerous clusters in the country who are also adversely affected by low steel prices. The statement further added that the Bureau of Indian Standards (BIS) in consultation with the Ministry of Steel, has been taking steps to ensure that only quality steel is produced in the country or imported from outside.
As many as 51 BIS Standards covering 1,376 Grades of steel have been notified and have been covered by Quality Control Orders by the Ministry of Steel. Thus, whether the steel is produced here or imported from outside the country, it is brought in conformity with BIS standards and no low-grade steel is manufactured or imported.
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