ndia’s steel industry stands as a cornerstone of its economic growth, underpinning infrastructure development, manufacturing, and defense. To bolster domestic production, improve competitiveness, and align with sustainability goals, the Government of India has introduced a series of strategic policies. From long‑term visions to targeted incentives, these measures are collectively reshaping the steel landscape.
1. National Steel Policy 2017: A Roadmap to 2030
The National Steel Policy (NSP) 2017 lays out a comprehensive vision for the sector through 2030, aiming to:
- Expand crude steel capacity to 300 million tonnes (Mt)
- Raise per‑capita consumption from around 77 kg to 160 kg
- Enhance domestic value addition, reducing import reliance
- Promote energy‑efficient technologies and R&D
By articulating clear targets and timelines, NSP 2017 provides investors and producers with long‑term clarity. It encourages modernization of aging mills, establishment of greenfield plants, and adoption of best practices in energy management.
2. Production‑Linked Incentive (PLI) Scheme for Specialty Steel
In April 2021, the government rolled out a ₹6,322 crore PLI scheme specifically for specialty steel—high‑end alloys and coated products that are largely imported today. Key highlights:
- Investment target: ₹40,000 crore over five years
- Production addition: 25 Mt of specialty steel by 2027
- Job creation: Over 500,000 direct and indirect jobs
By incentivizing domestic manufacturing of electrical steel, automotive‑grade steel, and corrosion‑resistant products, the PLI scheme aims to plug critical import gaps and support value‑added downstream industries.
3. “Make in India” & DMI&SP Mandate
Launched in 2014, Make in India encourages domestic manufacturing across sectors. In steel, this translated into the Domestically Manufactured Iron & Steel Products (DMI&SP) policy, which:
- Mandates use of Indian‑made steel for all central government infrastructure projects
- Applies to highways, railways, metro projects, defense, and nuclear installations
This procurement preference has significantly increased demand for home‑grown steel, fostering scale‑up of production capacities and reinforcing self‑reliance.
4. Vehicle Scrappage Policy & Circular Economy
Introduced in 2021, the Vehicle Scrappage Policy incentivizes the retirement and recycling of old, polluting vehicles. Benefits for the steel sector include:
- Availability of high‑quality steel scrap for Electric Arc Furnaces (EAFs) and induction furnaces
- Cost savings for secondary steel producers by substituting expensive iron ore with recycled steel
- Reduced carbon footprint, as scrap‑based steelmaking emits significantly less CO₂
This policy dovetails with broader circular‑economy goals, promoting resource efficiency and sustainable manufacturing.
5. Trade Remedial Measures: Anti‑Dumping & Safeguard Duties
To shield domestic producers from unfairly cheap imports, India’s Ministry of Commerce and Ministry of Steel have imposed:
- Anti‑dumping duties on specific products from countries like China, South Korea, and Vietnam
- Safeguard duties to manage sudden surges in imports
- Periodic adjustments to import tariffs on raw materials such as coking coal and ferroalloys
These tools stabilize domestic prices, level the playing field, and preserve the viability of both primary and secondary steel units.
6. Budgetary Push for Infrastructure
Year after year, the Union Budget allocates increasing capital expenditure to roads, railways, urban development, and affordable housing. Notable initiatives include:
- PM Gati Shakti National Master Plan, with multi‑modal connectivity projects
- Smart Cities Mission and AMRUT (Atal Mission for Rejuvenation and Urban Transformation)
Since construction steel accounts for a significant share of total steel consumption, these infrastructure outlays directly boost demand for beams, rebars, and structural sections.
7. Green Steel & Decarbonization Incentives
In line with India’s pledge to achieve net‑zero emissions by 2070, the Ministry of Steel is exploring:
- Green hydrogen–based direct reduced iron (DRI) routes
- Carbon Capture, Utilization, and Storage (CCUS) trials
- Financial incentives for energy‑efficient and low‑carbon technologies
Though in nascent stages, these policies will gradually underpin the transition toward “green steel,” enhancing global competitiveness and environmental stewardship.
Conclusion
An evolving tapestry of policies—from the visionary National Steel Policy 2017 and Make in India mandates, to targeted PLI incentives and trade safeguards—is reshaping India’s steel sector. These measures not only drive capacity expansion and value addition but also pave the way for sustainable, low‑carbon growth. As infrastructure ambitions soar and international markets beckon, the synergy between government strategy and industry execution will determine how India cements its status among the world’s leading steel producers.
Key References
Press Information Bureau confirms capacity increase from ~138 Mt in 2017‑18 to ~154 Mt in 2021‑22
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