Cabinet Approves National Steel Policy 2017; Government Backs Local Steel For Public Projects

The Union Cabinet has decided to give preference to domestically manufactured iron and steel products in government-sponsored projects and also approved a new steel policy that aims to triple the production capacity over the next 13 years.

The National Steel Policy 2017 aims to achieve 300 million tonne of steel-making capacity which will require an additional investment of Rs 10 lakh crore by 2030-31, a statement by the Press Information Bureau said.

“The objective is to make ours a globally competitive steel industry,” Union Finance Minister Arun Jaitley said in a media conference, adding that the policy aims to achieve a per capita steel consumption of 160 kilograms by 2030.

The Cabinet also cleared another policy which will mandate giving preference to iron and steel products that are manufactured in India for all government tenders. At least 15 percent value has to be added to the notified steel product in India to qualify as domestic steel, PIB said in a separate statement.

India is on track to surpass Japan as the world's second largest steel producer. Yet, it has per capita steel consumption of 61 kg, lower than the global average of 208 kg. Prime Minister Narendra Modi's aggressive push for infrastructure, housing, railway and defence are expected to spike the demand for steel in the country.

The new policy also aims to boost the domestic production of raw materials such as coking coal to reduce its dependence on imported coal by half.

India's steel production increased almost 11 percent over the last year, however growth of steel consumption has remained at 3.4 percent, according to the ministry of steel's annual report.