Now, let’s have a look at National Steel Policy 2017 first.

Objectives of the National Steel Policy 2017

The NSP aims at building a globally competitive industry. It aims to increase the per Capita Steel
Consumption to 160 Kgs by 2030-31 from existing level of around 61 Kg. It also aspires to
domestically meet the entire demand of high-grade automotive steel, electrical steel, special
steels and alloys for strategic applications by 2030-31. It intends to increase domestic
availability of washed coking coal so as to reduce import dependence on coking coal from 85%
to 65% by 2030-31.
The salient features of the National Steel Policy 2017:
Moving on to the salient features of NSP 2017-
• Steel Demand - It is expected that at the current rate of GDP growth, the steel demand will
grow threefold in next 15 years to reach a demand of 230 MT by 2030-31. To drive steel
demand, Ministry has identified construction and manufacturing sectors like Rural
development, Urban infrastructure, Roads & Highways, Railways etc. to be the key focus areas.
• Steel Capacity - It is anticipated that a crude steel capacity of 300 MT will be required by
2030. It will require significant capital investment of about Rs. 10 lakh Crore by 2030-31 and will
also generate significant employment in the range of 36 Lakhs by 2030-31 from the current
level of 25 Lakhs.
• Raw Material, Land, Water and Power - Various measures have been outlined in the Policy to
ensure availability of raw materials like iron ore, natural gas, Ferro-Alloys, Nickel, etc. at
competitive rates. To meet the target, additional land requirement is estimated to be around
91,000 acres considering green field expansion. The Ministry will ensure timely availability of
litigation-free lands, water and power to the industries. Water conservation at all levels will be
encouraged and the industry’s efforts will be supported.
• Infrastructure and Logistics - Adequate and timely infrastructure growth will have to be
pursued in the States of Odisha, Chhattisgarh and Jharkhand to address the increased industry
requirement in areas such as railways, roadways, power generation and distribution, pipelines
and conveyors, etc. To encourage export opportunities and be competitive, the Government of
India is also contemplating port-led development of steel clusters under the aegis of Sagarmala
program.
• Product Quality - Adoption of the standards by producers and users will be facilitated and
mandatory quality certification will be ensured.
• Technological Efficiency - Adoption of technologies conducive to effective & efficient
utilization of domestic resources, with minimum damage to environment would be encouraged.
Indian research institutes would be encouraged to come up with less resource- and -energy
intensive steelmaking processes as well as new products.
• MSME Steel Sector - Various measures will be taken to improve the performance of MSME
steel sector and sponge iron industry including ensuring of raw material, adoption of energy
efficient technologies, etc.
• Value Addition in Stainless Steel, Alloy and Special Steel - Though India is 3rd largest
producer of steel globally, it is still a net importer of stainless steel used in high-end applications
and also several high-performance & value-added steel products like electrical steel,
automotive grade steel, etc. Ministry will encourage steel producers to have strategic ventures
in production and development of these products.
• Environment Management - Capacity additions through coal based routes will have far
reaching implications for India in terms of environmental degradation. Hence, necessary efforts
will be made to have a judicious mix of production routes to reduce the carbon footprint of
steel.
• Safety - The Ministry will continuously monitor the safety performance of all its steel
companies including those in private sector through periodic reviews.
• Trade - India was a net exporter of steel in 2013-14. However, due to global factors, India
witnessed a significant surge in imports in 2014-15, which continued in 2015-16 as well. Steel
industry will be encouraged to be competitive and to develop a global presence. Government
will continue to be vigilant and will intervene in the market as and when required with suitable
trade measures to protect the interests of the domestic producers.
• Financial Risks - Considering the enormity of requirement of financial resources to add the
required steel capacity, the steel industry will be encouraged to reduce capital costs and remain
innovative in developing appropriate structure of the capital to minimize debt and service
equity.
• Role of Central Public Sector Enterprises (CPSEs) and Way Forward - CPSEs will be
encouraged to take leadership role in development of steel industry & the community. Efforts
will be made to ensure appointment of independent directors across similar/ independent
CPSEs.
• Focus on High-End Research - “Steel Research and Technology Mission of India” has been
established with an objective to spearhead R&D in iron & steel, creating state-of-art facilities to
conduct cutting-edge research.
This is the forecast of iron and steel demand and production by 2030-31:

 Total crude steel capacity is projected to go up to 300MT.

 Total crude steel demand/production is projected to go up to 255MT.
 Total finished steel demand/production is projected to go up to 230MT.
 Sponge iron demand/production is projected to go up to 80MT.
 Pig iron demand/production is projected to go up to 17MT.
 Per capita finished steel consumption is projected to go up to 158kg.

Certain assumptions were made for this prediction:

1. GDP growth rate assumed at 7.5% year-over-year

2. Elasticity of steel demand with GDP = 1.14 till FY 2020 and 1 from FY 2020 onwards.
3. Steelmaking capacity to reach 300MT by 2030-31.

GDP of India in 2017: 2.75 lakh crores (USD) GDP growth rate in 2017: 7.0%

GDP of India in 2018: 2.71 lakh crores (USD) GDP growth rate in 2018: 6.1%

GDP of India in 2019: 2.87 lakh crores (USD) GDP growth rate in 2019: 4.2%

GDP of India in 2020: 2.83 lakh crores (USD) GDP growth rate in 2020: contract by 7.7%

Steel consumption grew 6.8 per cent year-on-year in 2014-15. India’s steel imports surged 58 per cent in
May & domestic producers facing price pressures and cheap imports from countries such as China and
Korea.

The Sagarmala programme is the flagship programme of the Ministry of Shipping to promote port-led
development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially
navigable waterways and strategic location on key international maritime trade routes. The main vision
of the Sagarmala Programme is to reduce logistics cost for EXIM and domestic trade with minimal
infrastructure investment.

MSME: Jindal Stainless, Lloyds steel, India steel, OCL Iron, SAL Steel
National Steel Policy 2019

In the year 2019, some amendments or additions were made to the Policy for Providing Preference to
Domestically Manufactured Iron & Steel Products in Government Procurement (DMI&SP).

Some of the amendments that were made are as follows:

 Wherever minimum domestic value addition of 15% was mentioned, it has been revised to 20%.
 Changes were made to certain clauses such as Clause 1.3, 2.13, 5.1.5, 5.1.6, etc.

For example:

Previous Clause 7.3:

It is recommended that each bidder participating in the tender process should calculate the domestic
value addition using the below formula below so as to ensure the domestic value addition claimed is
consistent with the minimum stipulated domestic value addition requirement of the policy.

For iron and steel products

% domestic value addition:

Net selling price of final product - landed cost of imported iron or steel at the plant X 100 %

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Net selling price of final product

For capital goods

% domestic value addition:

Net selling price of final product - landed cost of imported iron or steel at the plant X 100%

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Net selling price of final product

Revised Clause 7.3:

For iron and steel products& capital goods
% domestic value addition:
Total value of the item to be procured / sold(excluding net domestic indirect taxes) - the value
of imported content in the item (including all customs duties) X 100 %
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Total value of the item to be procured / sold