India's Minister of State for Steel Shri Beni Prasad Verma has said that the country's crude steel production is likely to increase at an average annual rate of at least 8-10 percent over the next decade, on account of the rising trend of domestic steel demand.
Accordingly, India's crude steel production for the financial year 2009-10 was 65.84 million mt and for the period from April 2010 to January 2011 was 57.72 million mt. Production of finished steel in the country during the April-January period of the current financial year recorded an increase of 8.4 percent year on year, whereas domestic consumption of finished steel rose by 10.9 percent year on year.
According to the minister, India, which is currently the world's fifth largest steel producing country has the potential to become the second largest producer of steel globally on account of growing steel demand, its rich resource base of iron ore, skilled manpower and vast experience of steelmaking and the huge capacity expansion planned and being executed in the steel sector.
The minister said that, in order to facilitate the rapid growth of the domestic steel industry, the government has undertaken the following steps:
(i) Steel Authority of (SAIL) has decided to expand its crude steel output capacity from the existing 12.84 million mt to 21.4 million mt per annum by the year 2012-2013. Rashtriya Ispat Nigam (RINL) will be expanding its existing capacity of 2.9 million mt of crude steel production to 6.3 million mt per annum by December 2011. National Minerals Development Corporation (NMDC) is setting up a 3 million mt per annum integrated steel plant at Nagarnar, Chhattisgarh.
(ii) An Inter Ministerial Group (IMG) has been constituted to monitor and review issues concerning major steel investments in the country.
(iii) Export duty on iron ore of all types and grades has been increased to 20 percent in order to conserve iron ore.
Shri Verma said that India's current policy regime allows 100 percent foreign domestic investment (FDI) in the steel sector. Some multinational steel companies like POSCO and ArcelorMittal have signed memoranda of understanding with respective state governments to set up steel production units in the country. The total proposed capacity under FDI is approximately 45 million mt.
Since public sector steel companies have also planned for capacity expansion and modernization to meet future steel demand, it is expected that the public sector steel units will remain competitive and progressive, the minister added.