Steel Industry – Current challenges, National Steel Policy 2017, etc

Overhaul steel policy: NITI Aayog’s Saraswat

  1. Present status: India is now the third largest steelmaker in the world
  2. Problem: A global glut and a surge in cheap imports from China, Russia, Korea and Japan has dented the domestic industry’s fortunes
  3. The sector’s share in the banking system’s stressed assets kitty has gone up to 25 per cent
  4. The steel sector had flourished between 2003-04 and 2007-08
  5. Presently, the government is trying to support the industry through the RBI’s strategic debt restructuring scheme
  6. But it needs long-term finance like pension funds which can withstand cyclical volatility of profits unlike funding from banks or capital markets
  7. India’s steel production cost is about $320-$340 per tonne compared to $400 in China and the global average of $390
  8. But it is uncompetitive in global markets due to freight costs, higher credit costs, industrial power tariffs, high iron ore royalties, import duties and cess on coking coal.

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