Niti moots new policy to bring steel sector back on track

The Dollar Business Bureau

Government of India’s planning dept, Niti Aayog has proposed a new and dynamic policy to bring the $100 billion steel industry back on track and also to meet the 300 million tonnes (MT) capacity target by 2025.

Niti feels that just by making small changes in the country’s National Steel Policy, 2012, will not support the sector that has been flooded with cheap steel imports from China, Japan and Korea in the past few years, which has impacted its profits and sales, and has negatively impacted the sector’s capacity to pay back debts.

“There is need for a new and dynamic steel policy. Seeing the current situation of the steel sector, it may be unlikely to achieve the targets envisaged in National Steel Policy, 2012, i.e. a capacity of 300 MT and production of 275 MT by 2025,” the think tank said in a Working Paper on steel sector.

In order to bring the sector back on track, just tinkerings in the current policy would not bring the required transformation, it added.

According to Niti Aayog, there is a need to study the complete value chain associated with the steel industry, from raw materials to the manufacturing of finished products so as to find out the bottlenecks.

The Working Paper was drafted by Niti Aayog professional Ripunjaya Bansal and Niti Aayog Member V K Saraswat.

The paper said that there is a need to create an ecosystem to ensure profitability of the associated sectors such as mining, pellet, pet coke, sponge iron, etc.

The other related issue is to ensure that none of the sectors will make windfall profit at the cost of others, it added.