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
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