nd str and n rastr          t re   9.19
     – are presently faced with certain challenges.                   (iv) Minimum import price imposed on a
     Though, the government has taken several timely                         number of steel product for a six month
     steps53, they are still faced with huge challenges –                    period.
                                                                       (v) Reduced export duty on iron ore to 10
     steel inDustry                                                          per cent for select steel (from 30 per cent).
     Due to global and domestic factors Indian steel                    As per the government, any further custom
     industry has been faced with certain problems in              increase will impact the downstream industries as
     recent times. India is the fourth largest producer of         steel is used as an input in different industries. This
     crude steel in the world (with a total production             makes it clear that the Indian steel industry needs
     of 86.5 MT with installed capacity of around                  to get more competitive via cutting its borrowings
     110 MT today) – having 5 per cent share in the                and raw material costs together with enhancing
     global production. Global demand of steel has                 productivity.
     been near-stagnant (particularly China) – forcing
     global prices to fall up to 45 per cent in 2015 (in           Aluminium inDustry
     India prices fall has been up to 35 per cent). This           Though India has been a major player in the global
     has made major global steel producers to ‘push’               aluminium industry, in past few years it has been
     steel products into Indian market, thus raising               facing certain challenges due to global reasons.
     two major concerns:                                           India is second largest producer (after China) and
          (i) A surge in steel imports, and                        third largest consumer (after China) of aluminium
         (ii) Interest of domestic steel industry hit              in the world. Today, India produces around 4
               hard.                                               MT (China- 21.5 MT) and consumes 3.8 MT
                                                                   (China- 22 MT, USA- 5.5 MT). The challenges
          The Indian steel industry due to higher
                                                                   Indian aluminium industry is faced with, may be
     borrowings, higher raw material costs with lower
                                                                   summed-up as given below:
     productivity is at a comparative disadvantage.
     The GoI took the following measures to curb                        (i) World aluminium prices have dropped
                                                                             by 41 per cent between 2011 and 2015.
     the surging steel imports and make domestic
                                                                             During this period in India, imports as
     production sustainable:
                                                                             a proportion of total demand (sales plus
          (i) Custom duty increased by up to 2.5 per                         imports) have increased substantially
               cent on certain primary iron and steel                        from around 40 per cent to 57 per cent.
                                                                       (ii) Huge capacity has been created in China
         (ii) Anti-dumping imposed on industrial                             and world growth has slowed down.
               grade steel imports from China, Malaysia
                                                                      (iii) The cost of production for India is
               and S. Korea (ranging from US$180 to
                                                                             presently higher than international prices.
               $316 per tonne). Similar measures were
                                                                             India’s cost of production of aluminium
               taken by 40 other countries in the world.
                                                                             has been increasing gradually while world
        (iii) Provisional safeguard custom duty of                           costs remained static.
               20 per cent imposed on hot-rolled flat                 (iv) The Indian capacity has increased
               products of non-alloy and other alloy                         substantially in 2014–15 and 2015–16
               steel in coils.                                               but its utilization has not improved—
       53.   Ministry of Finance, Economic Survey 2017–18, Vol. 2,           utilisation was nearly 100 per cent up to
               ew elhi overnment of ndia,                                    2013-14 and has declined to 50 per cent