India Unveils Fresh Policy to Boost Steel Sector Investment

SEATTLE (Scrap Monster): India targets to achieve 300 million tonnes (Mt) per annum of steel production by 2031, significantly higher when compared with the current output level of 102 Mt. The country’s short term plan focuses on raising the production to 150 Mt within two years. Indian steel sector requires an investment of approximately INR 10 lakh crores to achieve the 2031 target. In order to boost steel sector investments, the government plans to introduce new policies that could attract more foreign investment.

Out of the 10 lakh crores, the Indian government plans to spend nearly 4 lakh crores in foreign exchange to buy state-of-the-art technology and machinery. As part of reducing the projected spending on foreign reserves, the government proposes to enter into joint venture projects with technologically advanced foreign companies. Also, it intends to fund domestic research and development (R&D) projects towards development of substitute technologies within the country, said Birender Singh, Minister of Steel.

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The state-owned Steel Authority of India (SAIL) is already in talks with ArcelorMittal for forming in joint venture in manufacture of automotive steel products. Discussions on possible joint venture are in progress with Korean steel giant POSCO for producing high-quality electrical grade steel locally.

In addition, the government has set up Steel Research and Technology Mission of India (STMI) - an umbrella organization to boost steel related research in the country through better coordination between academia and industry. Major Indian steel companies including SAIL and Tata Steel will form partnerships with premier institutions to develop indigenous steel technology. The government has called upon the companies to increase their share of R&D investment.