Steel Production in India: Key Strategies for Increasing Capacity and Quality

Steel is a de-regulated sector. The Government acts as a facilitator, by creating a conducive policy environment for the development of the steel sector.  The National Steel Policy (NSP) 2017 forecasts the following steel production/ capacity for the year 2030-31: –

The Government as a facilitator has taken the following measures to create a conducive policy environment for improving production and consumption of steel in the country: –

1. Implementation of Domestically Manufactured Iron & Steel Products (DMI&SP) Policy for promoting ‘Made in India’ steel for Government procurement.
2. The Government has launched the Production Linked Incentive (PLI) Scheme for Specialty Steel to promote the manufacturing of ‘Specialty Steel’ within the  countryand reduce imports by attracting  capital investments. The anticipated additional investment under the PLI Scheme for Specialty Steel is Rs. 29,500 crores and an additional capacity creation of around 25 million tonnes (MT) for Specialty Steel.
3. For Indian Steel to become globally competitive, the Basic Customs Duty on Ferro Nickel, a raw material, has been reduced from 2.5 percent to zero, making it duty free, while duty exemption on ferrous scrap has been extended upto 31st March 2026, in the Budget 2024.
4. The Ministry of Steel has published additional 16 safety guidelines for the Iron and Steel Sector on 25.07.2024.  These cover both process and work place based safety.  These shall minimize accidents and improve productivity through work place safety.
5. Steel Import Monitoring System (SIMS) has been revamped and SIMS 2.0 was launched on 25.07.2024 for more effective monitoring of imports to address the concerns of domestic steel industry.
6. ‘Make in India’ initiative and the PM Gati-shakti National Master Plan are helping enhance steel usage through further engagement with potential users, including from Railways, Defence, Petroleum and Natural Gas, Housing, Civil Aviation, Road Transport and Highways, Agriculture and Rural Development sectors.
7. Coordination with Ministries and States, besides other countries for facilitating the availability of raw material for steel making on more favourable terms.
8. Notification of Steel Scrap Recycling Policy to enhance the availability of domestically generated scrap.
9. Notified a Quality Control Order for 145 steel products under Indian Standards to ensure availability of quality steel products for the public at large.

The Government has taken the following initiatives towards adoption of energy efficient and innovative technologies in steel production: –

1. Ministry of New and Renewable Energy (MNRE) has notified National Green Hydrogen Mission for green hydrogen production and usage. The steel sector has also been made a stakeholder in the Mission.
2. 14 Task Forces had been constituted with engagement of industry, academia, think tanks, S&T bodies, different Ministries and other stakeholders to deliberate and recommend upon different levers of decarbonisation of steel sector.
3. The Ministry of Steel is implementing a scheme viz. “Promotion of Research & Development in Iron & Steel Sector” for providing financial assistance to reputed Academic Institutions, Research Laboratories and Indian Steel Companies for carrying out research in the Iron and Steel sector for the following thrust areas:-

1. Improvement in energy efficiency
2. Reduction in GHG emission to address climate change issues
3. Improvement in quality of steel products
4. To address the technological issues faced by the iron and steel industry
5. Beneficiation of natural resources like iron ore and coal for improved productivity
6. Utilization of wastes
7. Development of value added for import substitution