The government is looking to set up two scrap-based steel plants in India, one in west and another in north, to boost the production capacity of the country. “We are looking at the feasibility,” union steel minister Chaudhary Birender Singh said on Friday while speaking at the ‘Make in Steel’ conference in New Delhi.
Explaining the rationale for the chosen locations, Singh added more than 40% of scrap is available in the four states in northern India and around 67% of the scrap is imported in the western state of Gujarat. The steel made out of scrap is expected to be of high-quality, can be used for making scientific instruments and will be made through the melt-and-manufacture technology.
The country at present imports six million tonne of scrap every year but will be able to produce 7.5 million tonne of scrap by 2025 as numerous cars and trucks will reach the end of their life cycle. The government is also working on a shredding plant along with Mahindra and Mahindra which allows segregation of steel.
To further augment the domestic steel demand, the minister said usage of Indian steel should be made a precondition in the expression of interest while floating tenders for infrastructure projects and the government is exploring the options. The steel ministry is also in touch with other ministries for regulatory and advisory guidelines regarding the issue.
The steel sector contributes 2% to the gross domestic product of the country and according to the minister, the sector has a multiplier effect of 1.4 times and 7 times effect on employment taking into account the linked industries as well.
Singh also emphasised that to change the mindset of consumers who perceive steel to be expensive compared with goods such as plastic and glass, among others, and do not consider the long lifecycle of steel, the stakeholders should work along with the government and stress on marketing and branding. India has a low per capita consumption of steel at 61 kg compared with the world average of 208 kg.
To increase domestic consumption and production, the government recently unveiled the draft National Steel Policy 2017 which will replace the National Steel Policy 2005. The policy aims to increase the domestic steel production capacity to 300 million tonne from the current 85 million tonne by 2030-31 and increase per capita consumption to 160 kg by then.
The minister urged the industry participants to suggest thrust areas for the policy which will have speedy effects. He said the domestic private operators should match the international standards and the public-owned manufacturers should also follow suit.