India’s new steel impetus has started to pay dividends, it would seem.
The Government of India (GoI) has claimed that not only had the new policy saved it about $739 million (Rs 5000 crore) by way of foreign exchange, it had also helped it add around 24 million tons (MT) of crude steel capacity.
Steel Secretary Aruna Sharma told reporters that India had also replaced Japan as the second-largest steel producer this year. The new National Steel Policy (NSP) announced last year had upped the ante and set a new target of raising the capacity to 300 MT by 2030, and produce 250 MT of crude steel.
Sharma said there has been a massive forex saving after the policy was rolled out in May 2017. Steel production capacity itself had increased from 110 MT in 2014-15 to 134 MT in 2017-18, while 7 MT was added in 2017 alone.
In fact, in April this year, India’s crude steel production grew 4.4% to 8.59 MT, according to GoI data. India produced 8.22 MT during the same month a year ago, the Joint Plant Committee (JPC) said in a report. During April 2018, the output of hot metal was at 5.80 MT, as compared to 5.38 MT during April 2017.
Indian steel sector has been growing at a compounded annual growth rate (CAGR) of about 5% over the past four years on account of improvement in the overall capacity utilization, Sharma said. The GoI is hopeful that if the trend continues, the country’s steelmaking capacity would touch the expected 150 MT mark by 2020.
In 2017, India became a net exporter of steel, with exports of 8.2 MT registering 102% growth over the previous fiscal year. The exports from 5.6 MT in FY ’15 rose to 9.6 MT in FY ’18. On the other hand, the imports have declined by 36% from a level of 11.7 MT in FY 1’6 to 7.5 MT in FY ’18.
India has set a target of 300 MT of steel by 2020 and almost one-third of it alone would come from the province of Odisha in East India. Odisha is rich in raw materials needed for steel production, and has potential to produce 100 MT of steel.
About four years ago, India was fourth in global steel production behind to China, Japan and the U.S. Two months back, India’s position went up to second, moving past Japan. India’s crude steel production grew 4.4% to 8.59 MT during April 2018, according to official data.
Four years ago, the steel consumption per head in India was 58 kg. Today, it is 65 kg. The aim is to raise it to 107 kg by 2030.
On a slightly different note, Commerce Minister Suresh Prabhu was on a two-day visit of the U.S. starting June 10 to convince his counterparts that India was playing by the rules where steel and other tariffs were concerned.
Prabhu’s two-day trip to Washington included meetings with U.S. Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and National Economic Council Director Larry Kudlow. Prabhu’s objective was to try and get exemptions from the tariffs on steel and aluminum and save India’s benefits under the Generalized System of Preferences (GSP), which the Trump government has put under review.
The GoI has submitted a public comment to the U.S. government in its defense before a June 19 hearing of the GSP subcommittee, which will review India’s eligibility and decide whether New Delhi was providing “equitable and reasonable” market access in exchange for GSP benefits.