New Delhi: The Steel Ministry on 25 December expressed serious concerns on rising steel imports and warned that unless production of the alloy grew, it could spell a crisis for the domestic steel industry.
“After due examination, we found out steel imports have shot up 4.18 million tonnes between April to November this year against 2.3 million tonnes last year, marking a 77% increase, which is a matter of serious concern,” a Steel Ministry official told PTI.
While production has improved by 6.7% from 31.66 MT to 33.6 MT during the period, consumption has grown by 12.6%.
“After reviewing the situation, it was found that in the absence of new capacities and rising input prices, small steel producers were being affected, so they were resorting to imports to meet their domestic requirements,” he pointed out.
Iron ore spot prices have shot up by more than $50 during the past few months, which have put the small-scale producers at a disadvantage.
Besides, steel prices in the global market have been somewhat stable “and that was leveraged by the small-time producers to hold on to their clientele,” the official said.
Surprisingly, steel exports too have risen 6% to 3.38 million tonnes against 3.16 million tonnes during April to November this year.
“A stumbling block in the way of new capacities is the undue delay in land acquisition. Take the case of Posco and Tata Steel, both are facing problems in taking physical possession of their land,” he said.
Moreover, allocation of captive mines remain a big problem as the mineral-rich states are rarely able to take any decision in this connection.
“What is more concerning is the fact that the mining is becoming more prone to litigations. So, there is clearly a case for reviewing the entire gamut of issues relating to the mining sector,” the official said.
“The Inter-Ministerial Group (IMG) constituted by the government is regularly reviewing the situation. We are trying to talk to the concerned ministries and state governments as well as the stakeholders on how to streamline various procedural delays,” he said.
In its last meeting on 31 October, the IMG reviewed the situation and has sought the opinions of the concerned departments on various issues in the steel sector.
“We are envisaging an investment of about Rs2,76,000 crore in the steel sector within the next five years and these investments would not fructify if issues impeding them are not sorted out in due course of time,” the official said.
The new National Mineral Policy, which is yet to see the light of the day, is understood to have dwelt elaborately on these issues.
The Cabinet is currently examining various details of the policy and is likely to be tabled in the coming Budget Session of the Parliament. But, the government is also facing pressure on the policy from the mineral-rich states, which are asserting that their right to decide on the merit of the applications is not taken away from them.