The Ministry of Steel is working at the targets of carbon emission for the Indian Steel Industry

- Alok Sahay

Secretary-General, Indian Steel Association

As the Government is giving a major push to infrastructure projects, how has the steel industry benefited by it?

In simple terms, it will aid in steel demand creation. But there are multiple projects that will aid this demand. As listed below, the steel demand broadly comes from six steel consuming sectors in India. Out of all these sectors, construction sector, which includes infrastructure development (excluding railways) and real estate, contribute roughly 61% of India's steel use or steel demand. This sector is expected to be the main growth driver. Construction, capital goods and automobile sector together contribute around 80% of steel consumption in India:

Over the last few quarters, the trend in growth patterns of steel consumption and construction sector has remained aligned with each other. As a result, the growth in steel consumption will be determined by the growth in construction sector including Infrastructure.

The Prime Minister of India, in August 2019, announced the National Infrastructure Pipeline (NIP). It envisages Rs 111 trillion or US$ 1.4 trillion investment in 7,400 infrastructure projects over five years. NIP began in 2020 and ends in FY2025 or March 2025.

Some of the other drivers that will help the construction sector to grow are as following:

• AMRUT (Atal Mission for Rejuvenation and Urban Transformation) aims to provide basic civic amenities like water supply, sewerage, urban transport, parks etc.
• National Smart Cities Mission is an urban renewal and retrofitting programme that will provide a major facelift to existing inadequate infrastructure, including roads, flyovers, city sewage systems, community areas, shopping centres, hospitals and schools, etc.
• Freight Smart Cities plan focussed on warehousing is in the works as in the next 10 years demand for urban freight is expected to increase by 140%.
• Large part of the incremental steel demand will be met by basic grades like pre-engineered structures for warehousing construction, infrastructure development and smart cities projects will drive steel demand, as also will high-speed and metro rail projects, aided by domestic manufacturing of coaches and wagons.

What do you think policy makers and industry should do to augment steel usage/sales in India?

To promote steel usage in India following step need to be taken by the government/policy makers.

Need to redirect the traditional Indian emphasis on RCC- based designs to steel structure design. This can happen when change in mindset of engineers and designers takes place. For this change revising syllabus of Civil Engineering courses by Ministry of Education mandating use of structural steel is a pre-requisite.

Faster roll-out of infrastructure by mandating steel structures in government projects - China adopted this to achieve its massive infrastructure expansion. Similarly, Central and State Governments can play an important role in ensuring steel-based structures in the housing sector under PMAY-U and PMAY-G programmes as well as in affordable housing projects to increase rural consumption. Government mandate can create a starting point to facilitate private adoption of steel-based construction.

Government mandate is needed for more steel intensive structures for road and highway infrastructure, foot and road over bridges, flyovers, multi-level car parking, crash barriers, signages on National Highways, etc.

Promotion of Continuously Reinforced Concrete Pavement (CRCP) in National Highways having one single span of 10-15 km as against jointed plain concrete pavements (JPCP) having a small span of 4.5 m.

Discourage usage of non-eco-friendly materials: The Government as a policy may promote eco-friendly materials. Plastics, polymers, wooden shuttering and scaffolding in all constructions need to be discouraged and substituted by steel, which can be recycled and forms a part of the Circular Economy.

Steel intensive structures need a different skill set. Under skill development programme, skilled manpower needs to be developed.

Industry needs to increase its focus on product development to increase steel usage in construction sector where other materials prominently wood, plastics etc, are used which in turn will also help protect environment by protecting forest cover and less use of non- biodegradable plastics.

A significant increase of 35.4% in capital expenditure to Rs 7.50 lakh crore in Union Budget 2022-23 announced on Feb 1, 2022, will also have a multiplier effect and provide impetus to drive growth, thus helping in steel demand creation.

As India is a major producer and exporter of steel, what incentives and policy support you expect from the government to make the industry more competitive?

The Indian Steel Association (ISA), has over time, submitted its wish list to the government, which included many concerns of the steel industry, such as rationalising various duties and taxes along with policy measures to boost the growth of the industry. Some of the key points are as follows:

• Removal of 'Lesser Duty Rule' or LDR, which was introduced over two decades ago, in 1999: According to the industry body, the LDR has become ineffective since it is not binding upon WTO members and large economies including USA, China and Canada among others do not follow the rule even as import tariffs have been reduced to as low as zero under the various Free Trade Agreements and Regional Trade Agreements.
• Linking of Steel Import Monitoring System with ICEGATE - Central Board of Indirect Taxes and Customs portal that provides e-filing services
• Inclusion of the iron and steel in the Remission of Duties and Taxes on Export Products (RoDTEP) scheme: The scheme ensures that exporters receive embedded tax and duty refunds. The inclusion of steel in the scheme will give a boost to Indian steel companies and will help them to increase global competitiveness. The scheme, which came into effect on January 1, 2021, ensures that exporters receive embedded tax and duty refunds, which were earlier not possible.
• To restore the Anti-dumping Duties (ADD) and Countervailing Duties (CVD) on certain steel products, which were suspended by the government early last year.
• Removal of the Export Duty levied on Steel in May 2022.

We are representing with the Government of India on a regular basis and look forward to a positive response.

What are the major sustainability initiatives taken by the Indian Steel industry?

Currently, the Ministry of Steel is working at the targets of carbon emission for the Indian steel industry. This transition needs to take place in a phased manner as and when green hydrogen becomes available for steel production at reasonable rates. We are also in protracted discussions with the Ministry of Steel, Bureau of Energy Efficiency (BEE) and other stakeholders to fix limits of carbon emissions, process-route wise and the same is still a work in progress.

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