Government sets up measures to reduce steel imports

Driven by ‘Make in India’ initiative, slashing imports, keeping a tab on domestic prices and exploring alternate overseas sources for coking coal are set to top the government’s agenda for the steel sector in 2020 while steel manufacturers expect a “break out year” for the industry.

In order to minimize import of steel, the Government has notified Domestically Manufactured Iron and Steel Products Policy (DMI&SP) with an objective to encourage consumption of domestically produced steel by government organisations.

To meet the domestic demand for high performance steel, the government is facilitating R&D in the sector through the establishment of Steel Research and Technology Mission of India (SRTMI).  The Steel Ministry is addressing the issue of quality of steel products that are produced as well as block import of sub-standard steel. It has also notified Steel and Steel Products Quality Control (QC) Orders.

To prevent import due to unfair trade, the government has imposed Anti-Dumping Duty on a number of steel products imports. To reduce dependence on imported steel scrap, the government has further notified the Steel Scrap Recycling Policy.

The Government has recently introduced Steel Imports Monitoring System (SIMS) to monitor steel imports. Import duties on basic raw materials used by the steel industry, such as coking coal, ferro scrap, iron ore, ferro-alloys etc. is at a lower level.

This information was given by the Union Minister for Steel Shri Dharmendra Pradhan in a written reply in the Lok Sabha last week.

After 2019 saw the domestic market grapple with surge in imports, increased dependence on imported coking coal from select countries, the steel ministry is also focusing on managing availability of iron ore as leases of a clutch of mines are scheduled to expire in March this year.

A few rating agencies and merchant miners have expressed concern that the country may face a short-term disruption in supply of iron ore used in making steel due to the transition phase.

India would see a clutch of mining leases for coal and iron ore expiring by March 2020 and under the amended Mines and Minerals (Development and Regulation) Act. These leases will not be renewed, which means fresh auctions will be done.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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