Given the tough conditions, it may not be a cakewalk for the sector to script a turnaround. The external conditions would compound all efforts aimed at revival
The National Steel Policy 2017, approved by the government on Wednesday, hopes to make the sector brimming with activities again. It envisages investments worth Rs 10 lakh crore to create more capacity in the steel sector. The policy now will accord preference to domestically manufactured steel products when government agencies procure their requirement. It will help improve domestic steel consumption.
Plans to improve the sector assume significance as it reels under weak demand and rising raw material prices. The role of steel in the growth of a developing economy is immense. It is extensively used in a variety of areas such as social and economic infrastructure, defence and automobiles, among others. According to Niti Ayog, it is valued at over $100 billion and contributes around 2% to GDP of the country. India has become the third largest producer of steel with 89 million tonne (mt) of production, overtaking the US in 2015, after China (804 mt) and Japan (105.2 mt). There was a decline in steel consumption globally and in the major steel producing nations such as China, Japan, US and Russia in 2015, whereas India saw a growth of 4.5% in comparison with the previous year.
But given the tough conditions, it may not be a cakewalk for the steel sector to script a turnaround. The challenging external conditions, primarily the tardy economic growth and idle capacity globally, would compound all efforts aimed at the sector's revival. As the global prospects continue to remain bleak, the industry will have to depend on the growth of domestic consumption to surge ahead.
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