Dr. Martin Luther King, Jr., was immortalized after he uttered those now-famous words, “I have a dream.”
To use those words in the context of India’s steel story, the government here, too, has a dream – of seeing the nation hit its target of 300 million tons of crude steelmaking capacity by 2025-26.
MetalMiner has kept a close watch on this plan, reporting on its developments from the trenches. For example, in May, when there was a change in government in India, we reported on the many suggestions the new government had received from various quarters on rebooting the steel sector.
Now, about a month after the BJP government of Prime Minister Narendra Modi was sworn in, it seems to have taken stock of the realities on the ground and come out with a fresh report. After all, the plan to hit the 300 million tons per annum mark had been set by the previous congress-led government.
India’s Steel Ministry, under a new minister, seems willing to run with the ball handed to it by the previous team. It has, however, underlined hurdles such as a raw material crunch due to environmental constraints, mining caps, inadequate infrastructure to move iron ore, and the strain on its overall reserves because of the nation’s growth trajectory.
The report – Long-Term Perspectives for the Indian Steel Industry – may come as a breath of fresh air for an industry that once went into an artificially induced coma, much like F1 racer Michael Schumacher, because it was participating in a race full of obstacles including bureaucratic interventions, mining caps and low demand.
The Ministry has now recommended taking a hard look at the policy framework to enable the steel industry to capitalize on its domestic resources and turn them into a competitive advantage.
It has not given up hope. The report says the BJP government is of the opinion that if the magic figure of 300 mtpa has to be achieved, the country would have to work towards greater exploration, raising mining capacities and developing infrastructure, or else brace for significant exports. India’s current crude capacity for steel production is 96 mtpa.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.