The rate of growth in steel production in India has outstripped almost two fold the projections of a blueprint for the industry—the National Steel Policy of 2005—led by soaring demand, forcing the government to revise its estimates upwards.
The study estimated a compounded annual growth of 7.3% for the domestic industry, to hit a 100–million-tonne production level in fiscal 2020. The past two years have seen the industry grow at a brisker pace of 12–14% a year. Now, the steel ministry is expecting production levels of 200 million tonnes (mt) by 2020.
A 9% expansion in the economy has stoked demand for more goods and services, from construction to cars, that consumes steel.
A gung-ho Union secretary for steel, R.S. Pandey, told reporters on the sidelines ofa meet, that, given the performance in the first nine months, the current fiscal is expected to close at a steel production of 50 mt, marking a 12% rise from the previous year.
“We expect this production level to increase to 80 mt by 2012, and 200 mt by 2020, turning India into the second largest producer of steel from its current position of being the sixth,” Pandey said.
With investments coming into the country for steel making, he justified the imposition of an export duty of Rs300 on every tonne of iron ore exported. While miners and ore exporters are crying foul about honouring their long–term contracts, Pandey is more keen to ensure that the local steel producers have enough iron ore to meet their needs.
“Iron ore exports have more than doubled from 41 mt in 2001-02 to 100 mt at present,” he said.With Indian steel producers moving to technologies that can work with the kind of iron ore that is mostly exported, there is need to stem the exports of these, he said.