New steel policy favours Indian firms
ALL GOVERNMENT TENDERS WILL GIVE PREFERENCE TO DOMESTICALLY MANUFACTURED IRON AND STEEL PRODUCTS
The Cabinet cleared wide-ranging economic measures on Wednesday, including a national steel policy that favours domestic manufacturers in government projects.
“All government tenders will give preference to domestically manufactured iron and steel products. There will be a condition in it (tender) so that the surplus capacity is consumed,” finance minister Arun Jaitley said. Indian steel makers who import raw materials or intermediate products can claim the benefits of the domestic procurement provision if they add a minimum 15% value to the product.
The policy has a waiver for specific kinds of steel not made in the country, or where domestic makers can’t meet the quality standards required by a project.
“This is a supportive mechanism to the domestic steel producers. This will also go a long way to address the growth appetite the government is envisaging. It will further boost demand,” said Anjani Agrawal, global steel leader at audit and consulting firm EY.
The National Steel Policy 2017 aims to make India self-sufficient in steel production. It projects crude steel capacity of 300 million 255MT and per capita consump tion of 158kg of finished steel by 2030-31, as against the current consumption of 61kg.
The policy also envisages adequate local manufacturing to meet the demand for high-grade automotive steel, electrical steel special steels and alloys for stra tegic applications by the same year. It also sees a rise in domestic availability of washed coking coal to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
“The 300 million tonne (capac ity by 2030-31) is an ambitious tar get; we should be careful in cali brating the capacity additions to real long-term domestic demand of steel rather than hoping to rely on export markets,” EY’S Agrawal added.
The Cabinet also cleared international status for Vijayawada airport in Andhra Pradesh. It also approved modifications in the recommendations of the 7th Cen tral Pay Commission relating to the pension of pre 2016 pension