Indian steel companies have been affected by an influx of imports. Will the government continue to protect them?
We are not against imports but we have to protect Indian steel against dumping. We will also not take any measure that is not WTO-compliant. Since August 2016, anti-dumping measures have been initiated and now 124 items are covered under it.
What steps are being taken to lower input costs for steel companies?
We are trying to improve the logistics network for movement of both raw material and products. For instance, the cost of transporting fines is the same as finished products – Rs 400. One solution is transporting it through slurry pipelines. Now, the railways have agreed to give right of way along railway tracks. We have got a map from pellet makers as to where they want to tap the fines both on the east and west coasts. NMDC will construct the slurry pipelines, which will be underground. Transport costs will thus come down to Rs 50 per tonne. Railways are joining hands in this since it is part of their business and they will also provide protection.
What about key inputs like iron ore and coking coal?
We are discussing reclassification of iron ore, which is under freight class 165 and shifting it to 145, the same as coal or 145A, which attracts a lower rate. We have also urged for reduction of the 2.5% customs duty on coking coal. Also, the coal ministry will invest in washeries to reduce the ash content of local coking coal from 17-18% to an average of 13%. Consequently, imports will reduce by 30%... Also, the pricing mechanism of natural resources like iron ore/coal/gas is being looked into by the Niti Aayog. PSUs in these sectors should be profit-making, not profiteering.
Energy costs, especially power, remain a critical issue.
For this, the power ministry is considering whether a combined bunch of smaller user industries can be allowed to take up 26% stake in a power venture to get the tag of a captive user. Alternative energy sources like liquefied natural gas are also being explored. Duty on LNG was cut down by half in the budget to 2.5%. The petroleum ministry is working on long-term contracts to ensure assured supplies. Pellet makers have already assured us that if gas is available, their entire production can shift to gas, which is cleaner and greener.
The National Steel Policy 2017 is looking at 300 million tonnes of capacity by 2025, but consumption remains low. What steps are being taken to boost it?
Our consumption is 60 kg per capita, while China is at 489 kg per person and the global average is 208 kg. We have a long way to go and are taking serious steps towards it. We are in the final stages of amending the General Financial Rules (GFR), which decide all government tenders. We are bringing the concept of lifecycle cost in GFR. So, if the desired quality is available, ‘Made in India’ or locally produced steel will get preference for big-ticket infrastructure projects and for instance, bridges and drinking water projects, etc. Builders will be encouraged to use steel, which is earthquake resistant.
Will you coordinate your efforts with other ministries, too?
Yes. The commerce ministry is coming up with a generic policy on this. The steel ministry is also talking to other ministries, which are big spenders on infrastructure, about the advantages of steel usage. While cost-effectiveness will remain the key, the focus will be on lower lifecycle cost of steel while evaluating projects. It took seven years for our per capita steel use to cross from 50 to 60 kg. However, we want to go from 60 to 70 kg per person in three years. If domestic consumption goes up, then with lower input cost, protection against dumping and market enhancement, our steel industry should be fortified against global upheavals.
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