India is emerging as the fourth-largest steel producer in the World

India emerged as the fourth largest steel producer in the world and is expected to become the second largest producer of crude steel in the world by 2015, provided all requirements for creation of fresh capacity are adequately met.

India also maintained its lead position as the world’s largest producer of direct reduced iron (DRI) or sponge iron. Sponge iron production for sale was 20.8 million tonnes (MT) in 2008-09 which was higher by 2.1 per cent over 2007-08.
The country is likely to achieve a crude steel production capacity of 124 MT by the year 2012.

In the past year, 222 Memorandum of Understanding (MoUs) have been signed by the investors with various State Governments for setting up additional 276 MT of steel capacity in the country.

Major investment plans are in the States of Orissa, Jharkhand, Karnataka, Chhattisgarh and West Bengal.
The National Steel Policy 2005 had projected an annual steel consumption growth of seven per cent based on a GDP growth rate of 7-7.5 per cent and production of 110 MT of crude steel by 2019- 20.

Going by the existing growth trends, these estimates are likely to be exceeded and it is envisaged that in the next five years, demand will grow at higher annual average rate of over 10 per cent as compared to around 7 per cent growth achieved between 1991-92 and 2005-06.

The production for sale of total finished steel (alloy and non-alloy) was at 38.961 MT during April-November, 2009 as against 38.024 MT in corresponding period of 2007-08, a growth of 2.5 per cent.

Exports of total finished steel (alloy and non-alloy) was at 1.81 MT during April- November 2009 as against 2.952 MT in corresponding period of 2007-08, a decline of 39 per cent.
Imports of total finished steel (alloy and non-alloy) was at 4.59 MT during April-November, 2009 as against 4.134 MT in corresponding period of 2007-08, a growth of 11 per cent.

The consumption of total finished steel (alloy and non-alloy) was at 34.304 MT during April-November, 2009 as against 33.995 MT in corresponding period of 2007-08, a growth of 6.8 per cent.

Steel investments in the country has been constituted under the Chairmanship of Secretary (Steel) for conducting coordination meetings with the steel investors, concerned Central Ministries/Departments and the State Governments.


(i) Steel Authority of India Ltd (SAIL) became a Maharatna company and Rashtriya Ispat Nigam Ltd (RINL) became a Navratna company during 2010. This will enable these PSUs to expedite their investment decisions.
(ii) Mega Expansion Plans of SAIL, RINL & NMDC Ltd.
  • The expansion plans would increase the capacity of SAIL from 12.84 million tonnes (in 2006-07) per annum crude steel production to 21.40 million tonnes in the first phase to be completed by 2012-13., at an estimated cost of around Rs. 70,000 crore, which includes Rs. 10,000 crore for mine development.
  • Rashtriya Ispat Nigam Limited (RINL) is at an advanced stage of commissioning it crude steel capacity expansion project from 2.9 million tonnes to 6.3 million tonnes per annum. The project is likely to be completed by 2010-11.
  • NMDC has recently signed an MoU with the Government of Chhattisgarh for setting up a green field integrated steel plant of 3 million tonne per annum capacity in Nagarnar, Chhattisgarh with an estimated cost of around Rs. 15,525 crore.
  • NMDC is set to sign a MoU with Russia’s third largest steelmaker, Severstal, for a plant in Karnataka. The deal, entailing an initial investment of $ 1 billion from Severstal, would mark the biggest Russian investment in the non-defence sector as also the first Russian investment in the steel sector. NMDC is also planning to set-up a 1.2 million tonnes per annum (mtpa) capacity pellet plant at Donimalai, Karanataka.
  • 8.38% of the total government equity in NMDC was offered for sale through FPO. The entire proceeds from the offer for sale totaling Rs. 9,930.42 crore has been deposited in the government account on 29.03.2010.
  • Disinvestment of Government of India’s shareholdings in MOIL is on course. The IPO has been reported to have been oversubscribed by more than 55 times in the initial three days of the offer. Similar disinvestments are proposed in respect of SAIL and RINL.

  • Government had approved merger of Sponge Iron India Limited (SIIL) with NMDC. The merger process was completed during 2010.
  • Merger of Maharashtra Elektrosmelt Limited (MEL) with SAIL is also at an advance stage.
  • A draft Cabinet Note for revival of HSCL has been circulated for comments of the concerned Ministries/Departments before placing before the Cabinet
  • A proposal for restructuring of the Government owned companies collectively called the Bird Group of Companies for ensuring their revival was approved by the Government and the restructuring process is on.
  • In order to take care of its shipping needs SAIL has joined hands with Shipping Corporation of India (SCI) for a joint venture for import of coking coal. Joint Venture agreement was signed on 29.3.2010.
  • SAIL and Rail India Technical and Economic Services (RITES) have entered into a Joint Venture agreement on 14.9.2010 for setting up of a wagon manufacturing facility in Kulti (Asansol), Bardhman District of West Bengal. The wagon manufacturing plant will have a production capacity of 1,200 wagons per annum and rehabilitation capacity of 300 wagons per annum.

A Special Purpose Vehicle (SPV) called International Coal Ventures Ltd comprising of SAIL, RINL, CIL, NTPC and NMDC has been set-up for acquisition of coal mines in overseas territories, with an equity base of Rs. 3,000 crores to be leveraged with around Rs. 7,000 crore of debt.

The SPV will function like a Navratna company with powers to clear proposals involving investment of upto Rs. 1,500 crores. The company has already initiated efforts to acquire coal properties abroad with specific countries like Australia, Mozambique, Canada, Indonesia and USA.

Public sector steel units are expanding their dealer and distributor networks to reach district centers and remote areas of the country. Presently SAIL has a total marketing network of 2,851 dealers, 66 warehouses, 37 branch sales offices and 27 customer contact offices in 620 districts of the country.

RINL has over 150 dealers. Private sector steel companies have also been asked to expand their distribution network to cover almost all the major districts of the country.

Ministry of Steel has evolved a scheme for routing the allocation of iron and steel materials from main producers like SAIL, RINL and Tata Steel to SSI units and other Government Departments through the Small Scale Industries Corporations (SSICs) and the National Small Scale Corporation (NSIC) and provides handling charges of approximately Rs. 500-550 tonnes per tonne to the Corporations so that the Corporations supply the steel materials at the doorsteps of the SSI units.

Corporate Social Responsibility
CSR has been identified as an important parameter in the MoUs drawn up by all the PSUs with the Ministry. CSR activities focusing on environmental care, education, health care, cultural efflorescence and peripheral development, family welfare, social initiatives and other measures are underway in the PSUs. All profitable Steel PSUs have earmarked at least 2% of their distributable surplus for CSR activities.

Total budget of around Rs. 294.crore has been allocated for carrying out CSR activities by the Steel Ministry PSUs during 2010-11.

(vii) Promoting R&D in Steel Sector

In order to encourage R&D activities in iron & steel sector, Ministry of Steel is providing financial assistance from Steel Development Fund (SDF) and Plan Fund.
64 research projects initiated by public and private undertakings, research laboratories, educational and other promotional institutions have so far been approved at a cost of Rs. 442 crore during 2010, of which the SDF component is Rs. 278 crore. So far 31 projects have been completed and 24 research projects are underway. Rs. 118 crore was allocated from Plan Fund during the 11th five year plan for promotion of R&D in steel sector. Under this scheme 8 R&D projects have been approved with Plan fund of Rs. 111 crore.

(viii) Assessment of steel demand

The Ministry has initiated a study to assess the steel demand in the rural areas of the country and to examine the potential of increasing the level of steel consumption.
The study would cover 300 districts, 1,500 villages, 4,500 manufactures and 8,000 retailers spread over all the 35 states and union territories of the country.

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