Betting big on higher demand from construction, railways and other steel-intensive sectors, the government has set an ambitious target of nearly doubling the domestic per capita consumption of the alloy to 120 kg by 2020.
Betting big on higher demand from construction, railways and other steel-intensive sectors, the government has set an ambitious target of nearly doubling the domestic per capita consumption of the alloy to 120 kg by 2020. The increased demand will largely be met by indigenous production while part of it will be fulfilled by import.
Steel secretary Aruna Sharma told FE that since India’s economy is on a growth trajectory and spending on infrastructure is bound to go up, domestic steel consumption should increase as it has to go a long way to catch up with the world average of 234 kg per capita consumption and the developed countries’ average of 500-600 kg.
“I think India’s per capita consumption of steel should settle at around 600-700 kg. We will make all efforts to make it in phases – from over 60 kg now to 120 kg by 2020 and then to 240 kg. Then there will be no looking back, demand will automatically grow. So, we have to make all the hard work in the first two phases and more so in the first phase. The numbers are not impossible numbers,” Sharma said.
The onus, she said, is both on the government and the industry, both public and private. In the first phase, the industry has to very closely observe the pattern of use of steel in the infrastructure sector. The alloy has to make its presence felt in every area where there is a scope.
India has to consume a minimum of 144 MT of steel a year if it were to achieve the target. However, India’s current steel production capacity is around 118 MT per annum which should be increased to 150 MT to meet the domestic requirement.
The secretary said while most of the demand might be catered to by domestic producers, the government is not averse to import. “Around 14-15 MT capacity addition is in the pipeline. With growing demand, the private sector will obviously invest more vigorously. The secondary sector will also chip in. There are already some idle and under-utilised capacities. Again, we are neither against imports nor exports. We just won’t allow any foreign firm to sell their products in India below their cost of production,” she said.
Sharma said the domestic industry has to be ready to cater to the growing demand simply because if it does not, others will come and take the domestic market away from it. “Market will be created. Steel consumption is high in any developing country. Domestic industry should brace itself. It is a question of survival,” she said.