Context

1
 Introduction

India's steel sector must expand for the country's economy to grow. Steel consumption is regarded as a
sign of economic growth. While steel still dominates traditional industries like building, housing, and
ground transportation, the usage of specific steels in engineering fields like power generation,
petrochemicals, and fertilizers is growing. With the construction of new, cutting-edge steel mills, the
acquisition of capacities on a global scale by players, the ongoing modernization and upgrading of older
plants, the improvement of energy efficiency, and backward integration into international raw material
sources, India has taken a prominent place on the world steel map.

There are now no significant trade obstacles across national boundaries for steel, which is produced as a
globally marketable good. Also, there are no inherent resource-related limits that could negatively
impact the production of the same or the expansion of its capacity to meet rising demand on the
worldwide market. Even if there are any, they are always temporary and only apply to certain market
conditions. Government policy limits are hardly ever enforced anywhere in the globe. Hence, it is
doubtful that the industry as a whole or globally will raise significant competition difficulties under any
national policy framework. Moreover, steel has no inherent monopolistic characteristics. Thus, one
shouldn't anticipate complex competition concerns like those seen in industries like telecom, electricity,
natural gas oil, etc.

This does not imply that there are no pertinent or significant competition issues in the steel business,
either. Significant concerns have already been raised by the global steel industry's expanding trend of
mergers and acquisitions. Steel has historically been an oligopolistic business on a global scale, which
has occasionally led to concerns about the anti-competitive practices of the dominant major firms. On
the other hand, the collection of significant businesses that define the sector has evolved over time.

Competition-related issues are significantly influenced by trade and other governmental policies.
Subsidies, non-tariff trade barriers, discriminatory customs duties (on exports and imports), etc., may
cause major domestic market distortions and, as a result, change the competitive standing of individual
market participants. It is a well-known problem in this nation that the state specifically plays a part in
creating inflationary pressure and, as a result, the competitive circumstances in the market.

The following is the order of this report. By analyzing public secondary time series data on a few
important variables, Section 2 of the paper gives a brief overview of the performance and structure of
the Indian steel sector. Indicators like the number of participants and their relative production shares,
the proportion of public and private participants in total production and sales, the production capacity
of key participants, etc. are used to study market structure. Because the product is heterogeneous, this
analysis is conducted for the numerous steel market segments that make up the "relevant market." This
research serves as a starting point for pinpointing market categories where competition can be a cause
for worry. The policy and institutional framework controlling the steel industry in India, as well as the
role played by the government in the growth of this industry, are described in Section 3 of the report.

2
Identifying the structurally inherent and market-determined positions of various steel firms specifically
to determine their market power, vis-à-vis both their final consumers as well as those within the steel
industry, is the focus of Section 4 of the report, which looks at issues of competition of the steel industry
in India. This section also covers the problems resulting from market size and share, with a focus on the
investment-related elements. The control over natural resources that a select few players have, which
gives them a sizable cost advantage over the competitors, is another issue that bears substantial weight
in the context of competition. These are the outcomes of previous government initiatives to promote
the expansion of a specific industry. This section also analyses these preferential policies' effects on
competition. Section 5 concludes with a discussion on state of the competition in the Indian steel
sectorpointingtoafewkeyrecommendationsfortheCompetitionCommissionofIndia.

Little evidence of cartelization or cooperative pricing on the part of the incumbents is found in this
investigation. It concludes that government interference and poor response to changing circumstances
have contributed to shortages in the past, which in turn has led to incumbents acting in a way that
appears to be anti-competitive but is actually not. The main obstacles to the establishment of a level
playing field are unequal access to raw materials and export/import restrictions. The regulator might
take action in response to the last two as well as the easy access to data on costs and prices throughout
the value chain.

2. Steel Industry in India: Overview, Performance and

Structure

The modern Indian steel industry began with the founding of the Tata Iron and Steel Company (TISCO) in
1907. The Mysore Iron and Steel Company, later known as Vivesvaraya Iron & Steel Ltd, the Steel
Corporation of Bengal, later known as Martin Burn Ltd and Indian Iron & Steel Ltd, and the Steel
Corporation of Bengal, later known as Martin Burn Ltd and Indian Iron and Steel Co, were all established
after that. 1 These businesses were all privately owned.

2.1.1. KeyEvents

 1907*:Tata Iron and Steel Company setup.

 1913: Product in of steel begins in India.
 1918: The Indian Iron & Steel Co. setup by Burn &Co. to compete with Tata Iron and
SteelCo.1923*: Mysore Iron and Steel Company setup
 1939: Steel Corporation of Bengal setup
 1948: A new Industrial Policy Statement states that new ventures in the iron and steel industry
are to be under taken only by the central government.
 1954: Hindustan Steelis created to oversee the Rourkela plant.
 1959:HindustanSteelisresponsiblefortwomoreplantsinBhilaiandDurgapur.1964:BokaroSteelLtd.is
created.

3
  1973:TheSteelAuthorityofIndiaLtd.(SAIL)is
createdasaholdingcompanytooverseemostofIndia'sironandsteelproduction.
 1989:SAIL acquired Vives vata Iron and Steel Ltd.
 1993:India sets plans in motion to partially privatize SAI

India's modest iron and steel industry produced just over a million tones at the time of independence
(MT). With crude steel making up a sizable portion of all steel production, the government eventually
concentrated primarily on developing the basic steel industry. Since there were several public sector
establishments, the public sector held a disproportionately large percentage of the steel production
until the early 1990s. Upstream production, which mostly used raw steel products to produce finished
steel, was dominated by private players. A capacity ceiling was implemented. In essence, a controlled
regime was used to expand the steel industry, creating more public sector steel businesses across
diverse industries.

The steel industry remained under a controlled regime until the early 1990s, when economic
liberalization reforms were introduced. These reforms largely consisted of regulations, which included
large plant capacities being reserved only for the public sector under capacity control measures, price
regulation, the requirement for producers to obtain government authorization before adding additional
capacity, restrictions on foreign investment, and import and export restrictions.

There is no doubt that the government has a considerable bias in favor of businesses in the public
sector. Yet, not all government initiatives have benefited the public sector businesses. The past's
equalization rules for goods were one such instance. Another is the government's current use of "moral
persuasion" to rein in price increases for steel.

Nonetheless, the steel sector has entered a new phase of development after liberalisation, when a huge
number of restraints were eliminated, some immediately and others gradually. With deregulation, there
were several significant developments :

1. Large plant capacities that were reserved for public sector were removed;

2. Export restrictions were eliminated;

3. Import tariffs were reduced from 100 percent to 5 percent;

4. Decontrol of domestic steel prices;

5. Foreign investment was encouraged, and the steel industry was part of the high priority
industries for foreign investments and implying automatic approval for foreign equity participation up to
100 percent; and

6. System of freight ceiling was introduced in place of freight equalization scheme.

4
As a result, the domestic steel sector has since then integrated with the global steel industry and
become more market-oriented. Due to increased operations and the introduction of new, affordable
technology, private players are now more competitive both domestically and internationally. Since then,
India's private sector has contributed more to total output. The expansion of the private sector has led
to rapid increase in the steel industry's capacity, production, exports, and imports. More than 12 mt of
additional capacity have been added to the steel industry over the past ten years, largely in the private
sector. Recently, the steel industry is receiving significant foreign investments such as POSCO—South
Korean steel producer—and Arcelor-Mittal Group—UK/Europe based steel producer—announcing plans
for establishing about 12 mt production units each in India.

2.1.2 Steelproductionprocesses

Blast furnace/basic oxygen furnace (BF/BOF):Iron ore is essentially transformed into liquid iron
by BF. Pig iron is the term for iron that is generated by BF and contains significant amounts of carbon
and other impurities. Pig iron only has a few final uses, including manhole covers, because of its high
carbon content. Pig iron is subsequently processed into BOF, where its carbon content and other
impurities are burned or eliminated through slag separation, to produce steel products. Iron ore and
coal/coke are the primary inputs of BF. Because oxygen is the sole fuel utilised in the process, BOF is also
known as an oxygen furnace. BF/BOF routes are typically used in integrated milling to manufacture final
steel. Manufacturers like SAIL, RINL, TSL, and JSWL use this technology.

Electric Arc Furnace (EAF):The EAF's primary inputs are scrap and sponge iron, which are remelted
to create finished steel as its primary goal. It uses up to 400–500 kWh of electricity every tonne. The
Jindal group, ESSAR, and ISPAT are a few examples of producers who make use of this technology.

COREXorCipcorProcess: COREX is a cutting-edge method of producing steel. Although it is rarely

used, this method allows for the direct use of non-coking coal in smelting operations as well as the use
of lump ore and pellets as inputs. Steel companies can get rid of coking and sinter plants because to
these two benefits. Coking plants are used to turn non-coking coal into more efficient fuel, and sintering
plants are used to clean lump ore or pellets for processing. Iron ore and coal are the two primary inputs
of COREX. The Jindal Iron & Steel Company (JISCO) manufactures finished steel using COREX technology.

Induction Arc Furnace (IAF):is one of the most cutting-edge methods for producing steel. Its
primary fuel is electricity, just like EAF. The most efficient and environmentally friendly method of
making steel is IAF. Yet, it needs clean products as inputs due to its limited refining capabilities. Many
small steel businesses employ this technique.

The product's heavy weight greatly raises the cost of transportation and movement. Hence, for
manufacturing that is cost-effective, big integrated plants are the norm. For specialist steel and alloys,
smaller operations may produce them effectively.

5
2.2.1.SteelProducers

India has two main categories of producers: integrated producers and secondary producers. Iron ore and coke,
which are the key inputs of integrated steel units, have historically been produced exclusively by integrated steel
makers. Presently, Steel Authority of India Limited (SAIL), Tata Iron and Steel Co Ltd (TISCO), and RashtriyaIspat
Nigam Ltd. are the three largest integrated producers of steel (RINL). Because to its massive steel manufacturing
capacity plant size, SAIL dominates the other two.

Steel waste, sponge iron, direct reduced iron (DRI), or hot briquetted iron are all used by secondary
producers (HBI). Apart from other production facilities including independent hot and cold rolling units,
rerolling units, galvanising and tin plating units, sponge iron producers, pig iron producers, etc., it
primarily consists of Electric Arc Furnace (EAF) and Induction Furnace (IF) units. Essar Steel Ltd., Ispat
Industries Ltd., and JSW Steel Ltd. are examples of secondary producers. In addition to 1,200 re-rollers,
India has 650 micro blast furnaces, electric arc furnaces, induction furnaces, and energy-optimizing
furnaces. There are also 120 sponge iron makers there.

The majority of India's production of mild steel comes from integrated companies. Flat steel items
including hot-rolled, cold-rolled, and galvanised steel are among their core offerings. They also make
limited amounts of long and specialty steel. On the other hand, lengthy steel items are primarily
produced by secondary producers.

Re-rollers are units that fall under the category of secondary producers and produce modest amounts of
steel in the form of long and flat goods. These units either obtain their inputs through their backward-
integrated plants or from the market. To create finished steel or ingots, they use sponge iron, pig iron,
or a combination of the two.

2.2.2Typesofsteel

Steel is a composition of two or more metallic and/or nonmetallic elements that is based on iron and
usually dissolves into one another when molten. Since it is an iron-based alloy, it may also contain one
or more additional elements, such as carbon, manganese, silicon, nickel, lead, copper, chromium, etc.,
depending on its intended application. For instance, stainless steel (a type of steel) often contains more
than 10.5 percent chromium, with or without nickel or other alloying components. The steel melting
shop, which has a converter, open hearth furnace, electric arc furnace, and electric induction furnace, is
used to make steel.

According to its composition, steel can be divided into two general categories: alloy steel and non-alloy
steel. Using alloying components like manganese, silicon, nickel, chromium, etc., alloying steel is
created. The only alloying element in non-alloy steel is carbon, which is typically present. The three
primary forms of non-alloy steel are mild steel (up to 0.3% carbon content), medium steel (between 0.3-
0.6% carbon content), and high steel (greater than 0.6% carbon content). Special steel refers to all forms

6
of steel that are not mild steel. The fundamental reason for this is that particular attention is required to
ensure that such steel maintains a specific degree of chemical makeup. In accordance with the
composition of the steel, this process offers it various qualities.InIndia,non-
alloyingsteelconstitutesabout95percentoftotalfinishedsteelproduction,andmildsteelhaslargeshareinit.

Steel is divided into many types, such as liquid steel, ingots, semis (semi-finished steel), and finished
steel, based on shape, size, and form. The first product to come out of the Steel Melting Shop is liquid
steel. Ingots are formed from liquid steel after which semis are formed from ingots. Because additional
forging and rolling must be done to develop semis into finished steel products like flat and long steel,
semis are also known as semi-finished steel products. Ingots and semis are frequently found in crude
steel.

According to end use, steel is categorized into structural steels, construction steel, deep drawingSteel,
forging quality, rail steel, etc.The following chart depicts various types of steel
productsaccordingtodifferentcategories.

Chart2.2.3 :Categories/typesofsteelproducts

Steel

Form/ Composition Enduse

size/shape

Liquidsteel Alloysteel Non-alloysteel Structuralsteel

Crudesteel Stainlesssteel Low carbon Constructionsteel

orMildsteel

Ingots Silicon- Medium Deep

electricalsteel carbonsteel drawingsteel

Semis High High Railsteel

speedsteel carbonsteel

Finishedsteel Foreign
qualitysteel

Flatproducts Non-
flatProd
ucts

7
 2.3.1.PerformanceoftheIndianSteelIndustry
With deregulation, the Indian steel sector has advanced to a new stage of development, buoyed by the
strengthening economy and increased steel demand. India went from being the third-largest producer
of crude steel in 2017 to the second-largest producer over the past four years (2018–2021). According to
rankings made public by the International Steel Association, the nation was also the largest producer of
sponge iron or DRI in the world and the second largest user of completed steel in the world, behind
China, in 2021 (provisional).

The Government's role is that of a facilitator in a deregulated, liberalized economic/market environment

like India, setting the policy guidelines and establishing the institutional mechanism/structure for
creating a conducive environment for improving the efficiency and performance of the steel sector. The
National Steel Policy 2017, published by the government in this capacity, lays out a general plan for
promoting long-term growth in the Indian steel industry by 2030–2031, on both the supply and demand
sides. Also, the government has declared a preference for domestically produced iron and steel goods in
government purchases.

A Production-linked Incentive (PLI) Program for Specialty Steel has also been approved by the
government. 42 million tonnes of speciality steel are anticipated to be produced by the end of 2026–
2027. This will guarantee that the nation will make and use the speciality steel that would have
otherwise been imported, valued at almost 2.5 lakh crores. Similar to this, speciality steel exports will
increase to around 5.5 million tonnes from the existing 1.7 million tonnes, which generate FOREX of Rs
33,000 crore.

At the start of the twentieth century, as economies fueled by industrialization began to develop, nations
with strong steel industry profited from a first-mover advantage. India gained its independence in the
middle of this century and aimed to develop a mixed economy under its newly approved model. The
primary (raw materials), secondary (manufacturing), and tertiary (services) sectors required to develop
at the same time in order to accomplish this aim. Steel served as the connecting element between the
three industries as both a raw material and an intermediary product.

In addition to being a major sector product, steel is perhaps the most widely utilised raw material in
manufacturing. Steel is widely used in various industries because of its great corrosion resistance.
industries with a variety of reactive and non-reactive materials. Steel is the most important raw material
in the industrial industry because of its high strength, low weight, ductility, durability, and affordability.

India's economy has grown significantly thanks in large part to steel. This is seen from the parallel
growth trends of India's GDP and steel output, which also emphasises the dependence of the economy
on steel. While GDP (at constant prices, 2010) increased from USD 0.25 trillion in 1968 to USD 2.7 trillion
in 2018, the national consumption of finished steel increased from 6.5 MT in 1968 to 98.71 MT in 2018.

8
 ComparisonofGDPgrowthratesandcrudesteelproductionrates(1968–2018)

30

25

20

15

10

-5

-10
68
19

19

17

19

19

19

19

19

19

19

19

19

19

19

19
19

70

72

73

74

75

76

77

78

79

80

81

82

83
9

GDPgrowth(%) Crudesteelproductiongrowth(%)

Source:GDPdata:WorldBank,steelproductiondata:WorldSteelAssociation

Today, the GDP of the nation is boosted by the steel sector by little over 2%. This portion takes direct
contributions into account. Because other industries are dependent on the steel industry, the indirect
contribution is substantially bigger. Nearly 500,000 people are employed directly and a further two
million are employed indirectly by the steel sector. Steel has a 6.8x employment multiplier and a roughly
1.4x production influence on the Indian economy. According to the World Steel Association, 13 more
jobs are produced across the supply chain for every two employment created in the steel sector
globally.

With 110.92 MT produced in 2018–19 (up from 103.13 MT in 2017–18), India is presently the second
largest producer of crude steel in the world. Over the past ten years, the nation's domestic steel sector
has grown significantly. With total finished steel exports of 8.24 MT and imports of 7.22 MT in the same
year, it turned into a net exporter in FY 2016–17. With a positive trade balance of 2.138 MT the next
year as well, it kept its position. However, due to increased protectionism and a raging trade war
(among other things), India's exports have sharply declined by 33.9%, totaling just 6.36 MT in 2018–19.
Imports, on the other hand, increased by 4.7% to 7.83 MT.For a nation like India, which lost the chance
to develop a mature secondary industry in its haste to establish the tertiary/services sector, a positive
trade balance from completed steel manufacturing was exceptional despite its modest size. This
increasing tendency has been temporarily halted, at least temporarily, by the present global economic
slowdown and structural changes in several connected businesses.

9
 2005
India becomesone of the top 10steel producers intheworld
1973
New model formanaging the steelindustry presentedto the Parliament;set-upofSAIL

1875
Bengal Iron and SteelCompanyinBarakar 1962
Completion ofDurgapur, Bhilaiand Rourkelasteelplants

1907
Establishment ofTata Iron & SteelCompany(TISCO) 1991
Government of Indialiberalisesthe steelsectorbyremoving 2018
ironand steel industriesfromthereservelist India becomes the world'ssecondlargestprodu
ofcrude steel

1937 1954
Establishment ofSteelCorporationofBengalSet-up ofHindustan SteelPvt.Ltd.

Source:https://sail.co.in/background_history#top,static.investindia.gov.in

Globalcollaboration:
The Indian steel industry has done business with other nations since its foundation. The steel factories in
Durgapur, Rourkela, and Bhilai were built with assistance from Germany, Britain, and Russia,
respectively. In order to establish joint ventures (JVs) for the manufacturing of steel, Indian businesses
have signed several Memoranda of Understanding (MoU) with other nations throughout the years,
particularly in the technological sector.

Over the past 50 years, the steel sector has experienced astounding global expansion. According to the
World Steel Association, steel has been the cornerstone of progress for the past 100 years and will
continue to be so in order to address the challenges of the coming 100 years. Globally,
crudeproductionofsteelincreasedfrom734MTin 1991–92 to 1808 MT in 2018–19. In India, crude
production of steel increased from 17MTin1991–92 to 111MT in 2018–19.

10
 1,808
2000 1,690
1,627
1800 1,560
1600
1400 1,2511,239
1200
970
1000 848
799
800 734 725
600
400
200

1991-92 1994-95 1997-98 2000-01 2003-04 2006-07 2009-10 2012-13 2016-17 2017-18 2018-19

120 111
103
98
100
78
80
66
60 51
39
40 25 27
17 20
20

- 1991-92 1994-95 1997-98 2000-01 2003-04 2006-07 2009-10 2012-13 2016-17 2017-18 2018-19

China is the world's largest producer of steel, with a 51.3% share. India has surpassed Japan to become
the world's second-largest producer of steel, contributing a total of 5.9%.5 Steel production has
maintained up with demand on a worldwide scale. The amount of steel used worldwide in 2018 was
1712.1 MT, up from 1632.5 MT in 2017. Steel usage per person climbed from 216.3 kg in 2017 to 224.5
kg in 2018. 100% foreign direct investment (FDI) is permitted in India under the automatic method. This
has made it possible for other nations to make large investments in India's steel industry. Last year, FDI
in steel accounted for 0.34% of the GDP, with technology and cutting-edge equipment serving as the
primary drivers of investment.The Indian steel industry has been significantly strengthened by the
private sector, and in order to grow, Indian steel firms have bought international ones.

11
Growth prospects of the Indian steel industry
In the past 10–12 years, India's steel sector has expanded significantly thanks to strong local demand.
Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%.
The capacity for producing steel has grown concurrently, and the rise has been largely organic.

The National Steel Policy, which projects the growth trajectory of the Indian steel industry through
2030–31, was launched in 2017 by the Indian government, which has always supported the steel sector.
The following are the general guidelines of the policy:

 By 2030–2031, the annual production of steel is anticipated to exceed 300 million tonnes.
 At 85% capacity utilisation, crude steel output is anticipated to reach 255 million tonnes by
2030–2021.
 Assuming a yield loss of 10% for the conversion of crude steel to finished steel, or a conversion
ratio of 90%, the production of finished steel will reach 230 million tonnes.
 By 2030–1931, consumption is projected to reach 206 million tonnes with net exports of 24
million tonnes.
 As a result, it is expected that per capita steel consumption would increase to 160 kg.
 It is planned to make a further investment of INR 10 lakh crore.

Although the National Steel Policy, 2017, is a document outlining the Indian government's goal, it still
highlights the steel industry's potential for expansion. India produced 110.9 million tonnes of crude steel
at the end of 2018–19, according to figures from the Joint Plant Committee.9

By 2030–2021, crude steel output must increase at a CAGR of almost 7.2% to reach 255 million
tonnes.10 Given that the output of crude steel increased by 7.6% in 2018–19, this is easily attainable. As
a result, the growth potential that the government has projected in the National Steel Policy, 2017, is
consistent with the rate of expansion of the sector.

Naturally, the next concern is where the demand will come from to support the output levels envisioned
by the strategy. Taking a sectorial strategy is necessary. The graph below illustrates the rough sector-
based demand for steel.

Sector-wise demand for steel

Construction
5%6%
Railways

Automobiles
15%

Capital goods

9% 62% Consumer durables

Intermediate products
3%

12
Construction sector: About 62% of India's steel consumption or demand comes from this sector, which
also includes real estate and physical infrastructure (though not
5%6%railroads). In 2018, the industry
expanded by 8.6%. While growth is predicted to drop in 2019 to 5.4%, it is predicted to speed up again
in 2020 and beyond, rising by about 7% through 2024. 15%

In 2018, it was projected that the construction industry was valued around USD 500 billion. By 2025,
9% 62%
India will have the third-largest building market in the world. Growth in this industry as well as total
3%
steel demand will be driven by the infrastructure sector, which is now the government's main area of
concentration. The affordable housing and smart cities programmers will fuel growth in this sub-
segment of the real estate industry, which is expanding at a CAGR of over 4%. The following are a few of
the significant government projects that are either active or planned:

 The National Highways Development Project, part of the Bharatmala initiative, calls for the
construction of 34,800 km of new roads. Additionally, 24 logistics parks along the national
corridors have been designated as part of the Bharatmala initiative, and they will serve
important production and consumption hubs that account for 45% of all road freight.
 Port connection under the Sagarmala initiative aims to encompass all significant marine zones in
India through port-led industrial growth.
 The Urja Ganga Gas Pipeline Project intends to create a 15,000 km gas pipeline network in the
oil and gas industry.
 One hundred smart cities will continue to emerge under urban infrastructure. Ten additional
cities would be included in addition to the metro rail projects already underway in cities like
Delhi, Mumbai, Kochi, and Bengaluru. Basic amenities are being updated as part of the Atal
5%6%
Mission for Rejuvenation and Urban Transformation (AMRUT).
 National Investment and Manufacturing Zones (NIMZs) are being created all around the nation;
15%
14 NIMZs have already been given permission in principle. Also designated as NIMZs are eight
investment areas along the Delhi-Mumbai Industrial Corridor Project (DMIC).
9% 62%

3%

13
Over the next five years, India's overall investment in building is anticipated to rise by 50%. Road
projects and urban infrastructure are primarily responsible for the 9–10% annual growth that is
predicted for the infrastructure category. All of them are anticipated to directly and indirectly increase
steel demand in a considerable way. As an illustration, increased road development increases demand
for steel crash barriers.

Additionally, the real estate industry, which has been hampered by an excess of inventory in recent
years, is anticipated to grow in the years to come, particularly in the affordable housing sector. India's
urbanization rate is now about 33%, and by 2030–31, it is anticipated to reach 40%. This equates to a
shift of 90 million people from rural to urban regions, or twice the population of Argentina. In the
medium to long term, it is anticipated that there would be an increase in the demand for housing and,
as a result, real estate expansion in urban and semi-urban regions.

Railways: This industry, which accounts for 3% of the demand for steel, is expanding quickly. It
increased by 13.4% in 201814, and forecasts for 2019 call for a growth of more than 20%.15 Steel
demand is anticipated to increase dramatically as a result of projects like 100% track electrification
(electrification of 16,540 track km by 2021–22), dedicated freight corridors (of over 3350 km)connecting
industrial centers in western and eastern India, and high-speed rail lines.

Automobiles: The fourth-largest automobile sector in the world is found in India. It contributes to
around 9% of India's steel needs. India is the world's greatest producer of two-wheelers, three-
wheelers, and tractors. It is also the fourth-largest producer of passenger cars and the seventh-largest
producer of trucks. With an 81% market share, two-wheelers predominate, while overall passenger cars
account for 13% of the market. In India, the automotive industry is focused on the domestic market,
with more than 80% of sales occurring there.The industry is presently experiencing a decline after seeing
significant expansion in recent years. 2019 saw a decline in growth across all sub-segments.

14
Normalization of growth, however, is anticipated in 2020. By 2026, it is anticipated that the automotive
industry, including component components, would surpass USD 250 billion. Until 2026, the exports of
automobiles and auto parts from India are anticipated to increase at a CAGR of 3%.

In 2015, the Indian government unveiled the Automotive Mission Plan 2016-26 (AMP 2026). The plan
describes the vision for each sub-segment's growth, worldwide reach, level of technical development,
etc. It aspires to bring India up to par with the major global automakers and achieve sustainable
automotive growth.

Therefore, despite the little setback in growth this year, it is anticipated that the steel demand from the
automobile sector would continue. The Indian government, meanwhile, is making a big push for electric
vehicles, which will use less steel because they have fewer auto parts.

Capital goods: 15% of the demand for steel is contributed by the industry. It has a number of sub-
segments, with machinery and equipment standing out as the most significant. The machinery and
equipment section may be further broken down into machine tools, heavy electrical machinery, plant
machinery, and construction and earthmoving machinery.

As a result, it is clear that the sector depends on the heavy and light industries, mining, and building. In
other words, the performance of the secondary sector in general and the capital goods sector in
particular determines both.

A portion of the capital goods industry that makes up around 4% of India's overall gross value added
(GVA) and 23% of all manufacturing is machinery and equipment.18 The sector has historically
experienced inconsistent development and is heavily reliant on imports, particularly in the case of the
big machinery market.

15
Due to the poor acceptability of locally produced goods, which results in a lower capacity utilization
ratio, limited support infrastructure, and insufficient R&D expenditure, there are significant gaps in
technical capabilities.

India's industrial growths as well as its economic growth have both steadily slowed down since the start
of 2018. As a result, the growth of the capital goods industry was high in 2018, coming in at 6.4%, but is
predicted to decline to around 1.5% in 2019. Since late 2018, there has been a considerable decline in
manufacturing growth as a result of liquidity issues, particularly in the SME sector and stalling new
investments. The execution of stated projects has been hampered by declining solar and wind energy
rates. However, a recovery in the industry is anticipated for 2020.

The industry has seen significant volatility in the past. For instance, growth was 3.8% in 2016, 0.5% in
2017, then again increased to 6.4% in 2018. In 2019, sectoral growth is anticipated to decline to below
1.5% once more.

Given the significant changes this industry has seen and the fact that a number of economic sectors
have an impact on its future prospects, it is challenging to predict this industry's long-term growth.
Government programmers exist, though, to entice OEMs and technology companies to locate in India.
To resurrect the industry, the government is also emphasizing R&D.

Additionally, given India's emphasis on the Make in India plan, the sector's prognosis is still favorable.

Consumer durables: About 5% of India's

steel demand is contributed by this industry.
India's economy is based on consumer
spending, and historically, this industry has had
strong growth. For instance, the industry
expanded by 21.7% in 2018. But in 2019, this
sector's growth performance slowed down in
accordance with the slowing GDP growth.
Consumer durables had a large fall as a result of the high interest rates, the general election
uncertainties, and the liquidity crisis in the shadow banking sector.

The industry is highly diverse, though, and development prospects haven't always been favorable.For
instance, although the market for air conditioners grew in 2019, the market for frost-free refrigerators
and washing machines did not. Urban regions have seen persistently greater household demand than
personal disposable income, which was being financed by declining household savings and increased
leverage, which limited future growth. Consumption has been harmed by the tightening of financial
conditions (headed by NBFCs). Since a normalization of the growth trajectory is anticipated in the later
half of 2020 and beyond, moderate growth prospects are anticipated in the short future.

16
Intermediate products: The industry is responsible for the final 6% of India's steel demand. In addition
to industrial activity, this section is strongly related to the car sector, oil and gas sector, and both. As a
result, while the demand for gear boxes, bearings, etc. has been significantly impacted by the weakened
automotive industry, the demand for pipes, particularly big diameter pipes, is still increasing due to
continuing pipeline developments. But as the pace of economic expansion slows, demand for packaging
products like drums and barrels has decreased, and exports have likewise grown more slowly.

The future for the industry is promising over the medium term due to expectations of a recovery in the car
industry and continued growth of the oil and gas industry due to government expenditure.

Overall, the demand outlook for industries that use steel is favorable, and steel demand is expected to
increase. However, for steel demand to expand at a pace greater than 7%, India must return to a GDP growth
rate of 7% or higher. This will allow for market-driven circumstances to boost steelmaking capacity and
output.

Automobile: The fourth-largest automobile sector in the world is found in India. It contributes to around 9%
of India's steel needs. India is the world's greatest producer of two-wheelers, three-wheelers, and tractors. It
is also the fourth-largest producer of passenger cars and the seventh-largest producer of trucks. With an 81%
market share, two-wheelers predominate, while overall passenger cars account for 13% of the market . In
India, the automotive industry is focused on the domestic market, with more than 80% of sales occurring
there. The industry is presently experiencing a decline after seeing significant expansion in recent years. 2019
saw a decline in growth across all sub-segments. Normalisation of growth, however, is anticipated in 2020. By
2026, it is anticipated that the automotive industry, including component components, would surpass USD
250 billion. Until 2026, the exports of automobiles and auto parts from India are anticipated to increase at a
CAGR of 3%.17

17
In 2015, the Indian government unveiled the Automotive Mission Plan 2016-26 (AMP 2026). The plan
describes the vision for each sub-segment's growth, worldwide reach, level of technical development, etc. It
aspires to bring India up to par with the major global automakers and achieve sustainable automotive growth.

Therefore, despite the little setback in growth this year, it is anticipated that the steel demand from the
automobile sector would continue. The Indian government, meanwhile, is making a big push for electric
vehicles, which will use less steel because they have fewer auto parts.

Challenges before the Indian steel industry

There are particular difficulties associated with the steel industry's growth trajectory. The five main obstacles
to the growth prospects highlighted in the previous section are outlined below.

18
The Indian steel sector is frequently viewed as being globally uncompetitive.

India was ranked second in 2016 by World Steel Dynamics in terms of the price of turning iron ore into steel,
just behind Ukraine. In comparison to their equivalents in China, Japan, or Korea, Indian mills were found to
be more cost-effective at turning iron ore into steel. The majority of integrated steel makers in India are
among the top 35 steel mills worldwide.

The answer to the dichotomy can be found in a report by theNational Institution for Transforming India
(NITI Aayog).19ThereportexplainsaUSD80–100costdifferenceinthetablebelow:

(USD/tonne)
Logisticsandinfrastructure 25–30
Power 8–12
Importdutyoncoal 5–7
CleanEnergyCess 2–4
Taxesanddutiesonironore 8–12
Finance 30–35
Totalcostdisadvantage 80–100

Finance :A capital-intensive industry is steel. The cost to establish 1 tonne of steel production capacity
using the greenfield method is close to INR 7,000 crore. Naturally, borrowing money is frequently
necessary to cover the cost of any expansion or new steel capacity. And when compared to the cost of
financing in industrialized nations like China, Japan, and Korea, India's cost of financing is astronomically
high. This raises the ultimate cost of steel by roughly USD 30-35.

The demand for steel is also cyclical. Consequently, the return on investments decreases during a
recession. The demand for steel grew rapidly between 2004 and 2011. Most steel producers expanded
their current capacity as a result of this. But between 2014 and 2016, the Indian steel sector
experienced a severe decline. This ultimately led to several steel producers in 2018 becoming subject to
bankruptcy procedures. In actuality, the sector has not yet resolved every bankruptcy case. Financial
institutions are now hesitant to lend to the industry.

As a result, a major chunk of the challenges the steel industry has faced since 2014 may be traced to the
exorbitantly high financing rates or cost of borrowed capital. Despite the Reserve Bank of India cutting
the policy repo rate five times and by 135 basis points in 2019 alone, the cost of capital in India
continues to be extremely high, and Indian steel makers continue to be at a disadvantage in the global
market. The largest obstacle to the Indian steel industry achieving the goals set forth in the National
Steel Policy, 2017, will be finding finance for an increase in capacity of 100–150 million tonnes. The main
problem will be finding the additional INR 10 lakh crore in funding, according to the policy paper.

Logistics: The majority of Indian steel producers find it difficult, expensive, and difficult to manage
their logistical needs. Iron ore, rather than coal or coking coal, is the main raw material used in the
production of steel. Steel is likewise a bulk commodity, and both minerals are bulk commodities.

19
Therefore, moving bulk commodities is always difficult, whether it is physically moving steelmaking raw
materials to steel mills or physically moving completed steel to demand locations.

In addition, unlike China, Japan, or Korea, where the majority of their steel mills are situated near the
coast, India's steel plants are mostly found inland. This makes it more difficult to manage the logistics
needs of the majority of Indian steel producers.

Naturally, the favoured route of transportation for steel producers is rail. Since just three steel mills may
partially rely on the sea route, more than 80% of the logistical needs of the steel sector are satisfied by
the railway network. Furthermore, it is economically unviable to move bulk commodities on roads.

For Indian steel producers, handling logistics is difficult due to the railroads' severe infrastructural
problems. In addition, it has long been known that the Indian Railways heavily rely on revenue from
freight traffic, particularly from bulk goods. In other words, because Indian Railways subsidises
passenger traffic with freight revenues, the cost of moving goods through the railways—both raw
materials and finished steel—is artificially considerably higher.

The relative cost disadvantage for Indian steelmakers is estimated by NITI Aayog to be between USD 20
and USD 25 per tonne of finished steel. According to the analysis, compared to Rotterdam to Mumbai's
freight cost of USD 34 per tonne, Jamshedpur to Mumbai's freight cost might be as high as USD 50 per
tonne.Approximately 3 tonnes of raw material must be transported for every tonne of steel produced.
when a result, the domestic steel industry's logistical needs will become insurmountable when India's
steel output doubles over the course of the next ten years unless immediate action is made to expand
and strengthen the physical infrastructure, particularly by the Indian Railways.

The steel sector is already experiencing a railway rake shortage.

According to India's National Steel Policy from 2017, the country will have zero steel imports and 24
million tonnes of annual steel exports by the years 2030–31. Unless there is a reduction in freight costs,
which lowers the price or cost of steel and increases the competitiveness of Indian steel internationally,
these goals will stay on paper.Thefollowingsteps can helpinthis direction:

 decreasing iron ore's freight class to 145, making it the same as the freight classes for coal and
limestone
 Iron ore, coal and coke inclusion in the Long Term Tariff Contract (LTTC) Policy
 No long-term freight structure strategy for short-lead traffic to a 100 km distance
 Elimination of the strategy of route rationalisation (charging of limestone and iron ore over a
longer route)
 the elimination of the long-term freight structure policy for short-lead traffic up to a 100-
kilometer distance.

In conclusion, infrastructure limitations, particularly in the connection of the railways, are another
external obstacle that may be more important than considerations for future growth. Capacity

20
expansions would remain constrained until the Indian Railways make a considerable effort to reduce
costs and improve railway connections.

Tax, duties and cess :Even though the government has decreased corporate tax rates to 25%,
there are still a number of non-creditable taxes, levies, and cesses that are expressly paid by the steel
industry and that hurt Indian steel products' ability to compete on the international market.

According to NITI Aayog, Indian steel producers pay between USD 15 and USD 23 more in taxes, tariffs,
and cesses than their international counterparts. According to our own calculations, the amount is
around USD 35–40, as explained below.

Input Typeoftax Amount(INRperMT)

Ironore Royalty, Clean Energy Cess, District Mineral Foundation, 1,100
NationalMineralExplorationTrustandafewothers

Electricity Electricityduty 500

Freight Taxesonfuel 500
Customsduty Customsdutyonimportsofrawmaterials 650
Total 2,750

Source:ISAanalysis

It would only improve India's competitiveness and, in turn, create value to both upstream and
downstream steel-producing and steel-using units if these taxes, cesses, and tariffs were eliminated or
made creditable.

The National Steel Policy has established several objectives. Indian steel needs to be internationally
competitive in order for these to be realized.

If not, India won't be able to raise steel exports over a certain point and will continue to face
competition from less expensive imports. The government must make sure that the additional USD 80–
100 burden that Indian steel companies are bearing is eliminated in order to stop this. The easiest thing
to do is the removal of non-creditable taxes, tariffs, and cesses. If not, we anticipate this to be a
significant difficulty moving ahead.

Raw materials: India has sizable deposits of coal and iron ore, but very little in the way of coking
coal. According to the National Steel Policy, India's steel production capacity would exceed 300 million
tonnes, 68% of which will be produced in blast furnaces, which require coking coal. Coking coal is used
to create roughly 200 million tonnes of steel annually, which equates to a coking coal consumption of
about 180 million tonnes.The majority of India's coking coal needs are imported from Australia.
However, the quantity of coking coal and its price have fluctuated greatly according to the whims of the
weather. With an estimated 19.4 billion tonnes of coal reserves, the Jharia resources in eastern India are
among the biggest coal deposits in the world. The only supply of coking coal in India is the Jharia coal
resources, which have a reserve of around 12 billion tonnes. Since the beginning of mining activities in

21
early 1900, the coal mines in Jharia have had to contend with fires and challenges connected to survival.
Additionally, the whole town of Jharia, which is home to nearly to 100,000 people, is situated atop coal
fields. In addition to securing the steel industry's need for coal and serving as a significant inducement
for investment, the development of the Jharia coal resources will also contribute to the overall
development of the region

According to the National Steel Policy of 2017, just 65% of India's coking coal needs would be imported
by the years 2030–31. If India were to need 180 million tonnes of coking coal each year, around 60–65
million tonnes would come from local sources. If the Jharia resources are not exploited, this poses a
significant threat to the Indian steel industry's hopes for expansion.

Environment and energy consumption : Environmental issues are gaining prominence, and the
Indian steel sector is not exempt from this trend. The second-largest worldwide energy user, the steel
sector uses a lot of energy. This has an impact on the nearby environment as well as increasing carbon
footprint. Steel will be produced using energy-efficient techniques, which will lower manufacturing costs
and boost competitiveness. Utilizing cutting-edge steel manufacturing methods and extremely advanced
energy management systems can help achieve this.

As per the World Steel Association, improvements in energy efficiency have led to a reduction of about
60% in the energy required to produce a tonne of crude steel since 1960, as highlighted in the figure
below:

2.3.2 Production

1. In 1991 and 1992, respectively, the licence and authority over the steel sector were removed.

22
2. In 2021, India was the world's second-largest producer of crude steel.

3. Total finished steel production (alloy/stainless + non alloy) was 113.60 mt in 2021–22 (provisional), up
18.1% from the previous year. Pig iron production increased by 18.1% over the previous year to 5.76 mt
in 2021–22 (provisional).

4. In 2021, India produced the most sponge iron globally. 77% of the nation's total output of sponge iron
(39.03 mt) in 2021–2022 was produced using the coal-based approach (provisional).

Data on production of Pig Iron, Sponge Iron and Total Finished Steel (alloy/stainless + non-
alloy) are given below for last five years:

Indian steel industry: Production (in million tonnes)

Category 2017-18 2018-19 2019-20 2020-21 2021-22*
Pig Iron 5.73 6.41 5.42 4.88 5.76
Sponge Iron 30.51 34.71 37.10 34.38 39.03
Total 95.01 101.29 102.62 96.20 113.60
Finished
Steel
Source: Joint Plant Committee; *provisional

Graphical representation of above table is given below:-

23
2.3.3.Demand - Availability
1.The demand for and supply of iron and steel in the nation are mostly determined by market forces,
and any discrepancies between the two are largely filled by imports.

2. There is interaction with consumers through the regularly scheduled meetings of the Steel
Consumers' Council.

3. Interface aids in addressing issues with quality and availability.

2.3.4. Steel Prices

1 On January 16, 1992, price control on iron and steel was eliminated. Since then, the interaction of
market forces has influenced steel pricing.

2 A number of factors, including changes in the price of raw materials, market variables such as supply
and demand, and global pricing patterns, affect domestic steel prices.

3 The Government, acting as a facilitator, keeps an eye on the state of the steel market and, based on its
evaluation, adopts fiscal and other policy actions.

2.3.5 Import and exports

Imports

• Data on import of total finished steel (alloy/stainless + non alloy) is given below for last five years:

Indian steel industry: Import of Total Finished Steel (in million tonnes)
Category 2017-18 2018-19 2019-20 2020-21 2021-22*
Qty 7.48 7.83 6.77 4.75 4.67
Source: Joint Plant Committee; *provisional
Exports

• During last five years, India was a net exporter of total finished steel in 2017-18, 2019-20, 2020-21
and 2021-22.

• Data on export of total finished steel (alloy/stainless + non alloy) is given below for last five years:

Indian steel industry: Export of Total Finished Steel (in million tonnes)

24
 Category 2017-18 2018-19 2019-20 2020-21 2021-22*
Qty 9.62 6.36 8.36 10.78 13.49
Source: Joint Plant Committee; *provisional

Graphical representation of trade of total finished steel for last five years is as below:-

ProductionandConsumption FinishedSteel:ExportandImport
120
14
100
12
80
10
60
8
40
6
20
4
0
2
0

CrudeSteelProductionFinishedSteel 20172018201920202021*
Consumption
2017 2018 2019 2020 2021* Import Export

25
 PUBLIC SECTOR

Introduction There are seven Central Public Sector Enterprises (CPSEs) under the administrative control
of the Ministry of Steel. Detailed overview of the CPSEs and their major subsidiaries is as under:

Steel Authority of India Ltd. (SAIL)

SAIL, a "Maharatna" Central Public Sector Enterprise (CPSE), is a business that has been registered under
the Companies Act. It has five integrated steel factories located in Bokaro (Jharkhand), Burnpur (West
Bengal), Rourkela (Odisha), Durgapur (West Bengal), and Bhilai (Chhattisgarh). Alloy Steels Plant in
Durgapur, West Bengal; Salem Steel Plant in Salem, Tamil Nadu; and Visvesvaraya Iron and Steel Plant in
Bhadravati, Karnataka are the three special and alloy steel mills owned by SAIL. SAIL has also several
Units viz. Research and Development Centre for Iron and Steel (RDCIS), Centre for Engineering and
Technology (CET), Management Training Institute (MTI) and SAIL Safety Organisation (SSO) all located at
Ranchi, Colliery Division located at Dhanbad, Environment Management Division (EMD) and Logistics &
Infrastructure Department (L&I) located at Kolkata, SAIL Growth Works at Kulti and SAIL Refractory Unit
with headquarters at Bokaro. In Chandrapur, Maharashtra, lies the Chandrapur Ferro Alloy Plant (CFP).
The Central Marketing Organisation (CMO), which has its main office in Kolkata, manages the Company's
national marketing and distribution network.

Capital Structure
The Authorized Capital of SAIL is Rs. 5,000 crore The paid up capital of the Company is Rs. 4130.53 crore
as on 31.12.2021, out of which 65% is held by the Government of India and the balance 35% by the
Financial Institutions, GDR holders, Banks, Employees, Individuals, etc.

Financial Performance
The business generated revenues of Rs. 72,220 crore between April and December 2021 and Rs. 68,452
crore in the fiscal year that ended on March 31, 2021. In the financial year that concluded on March 31,
2021, the profit after tax was Rs. 3,850.02 crore and Rs. 9,597.4 crore, respectively. For the fiscal year
2021–2022, the corporation has announced an interim dividend of Rs. 4 per share.

Production Performance
The details of actual production are as under:

2019-20 2020-21 2021-22*

Hot Metal 17.438 16.582 13.816
Crude Steel 16.155 15.215 12.770
Saleable Steel 15.147 14.602 12.455
*upto December, 2021

Due to numerous limitations imposed by MHA, GoI, and the relevant State Governments at all steel
plants/units during Q1 FY' 20-21 as a result of the severe spread of COVID-19 (2nd Phase).

26
Raw Materials: SAIL produced 34.63 Million Tonnes (MT) of iron ore from its captive mines in 2021,
which was enough to satisfy all of its steel plants' iron ore needs. 1.88 MT of fluxes (limestone and
dolomite) and 0.26 MT of raw coking coal were produced from captive mines owned by SAIL,
respectively. 0.91 MT of raw coal from SAIL coal mines and sources obtained through CIL were
processed at Chasnalla Washery to create 0.45 MT of washed coking coal.

According to orders from the Ministry of Mines dated 16.09.2019, 03.12.2019, and 04.01.2020, SAIL
made 4.31 MT of iron ore fines, dumps, and tailings available in the open market during CY'21 in order
to prevent a potential disruption in iron ore supplies caused by the expiration of various iron ore
merchant mining leases by 31.03.2020.

Manpower: The manpower strength of SAIL as on 01.01.2022 was 62,960 (Executive 10632/Non-Executive
52328). The manpower has reduced by 2,604 from 1st April, 2021 to 31st December, 2021.

Capacity Expansion and Modernization Projects: The Modernization and Expansion Plan (MEP) was
implemented by Steel Authority of India Ltd. at its Integrated Steel Plants in Bhilai, Bokaro, Rourkela,
Durgapur, Burnpur, and Special Steel Plant in Salem. The proposal called for increasing the capacity of
producing crude steel from 12.8 million tonnes annually to 21.4 million tonnes annually. SAIL's current
working crude steel capacity is 19.51 MTPA, nevertheless.

The MEP at the steel plants at Bhilai, Rourkela, Burnpur, Durgapur, Bokaro, and Salem has been finished,
and the facilities are now operational and ramping up. One of the four SMS-III casters at the Bhilai Steel
Plant that were intended to be beam blank casters under MEP are now being converted to bloom-cum-
beam blank casters.

Addition, Modification, Replacement (AMR) Projects

Apart from Modernization and Expansion Projects, SAIL undertakes Capital Investments from time to
time under AMR schemes. Major highlights of the large projects (costing >Rs. 50 Crore) initiated/
completed during 2021, are as follows:

Facilities completed:
 Replacement of Converter Shells for the Steel Melting Shop's Three Converters at the Durgapur
Steel Plant.
 Power Evacuation for the Durgapur Steel Plant's 2x20 MW New Power Plant.
 Upgrade of Stoves at Bhilai Steel Plant for BF-4.

Orders placed:

 Modification of the CSW Plant's (Crushing Screening Washing Plant) Washing Circuit at the Dalli
Mines of the Bhilai Steel Plant.
 Power supply arrangements for the Bokaro Steel Plant's proposed 2000 TPD BOO Oxygen Plant.

27
 Rashtriya Ispat Nigam Ltd. (RINL)

The corporate body of Visakhapatnam Steel mill, the nation's first shore-based integrated steel mill in
Visakhapatnam, Andhra Pradesh, is Rashtriya Ispat Nigam Limited, a Navratna CPSE. It is incorporated
under the Companies Act, 1956, and has its registered office there.

In Andhra Pradesh's Visakhapatnam, RINL has a single integrated steel factory with a 7.3 MTPA liquid
steel capacity. Additionally, the firm has three mines: the Jaggyyapeta mine for limestone, the Garbham
mine for manganese, and the Madhram mine for dolomite in Telangana State. at Andhra Pradesh, RINL
also operates river sand and quartzite mines at Sarepalli and Kintada, respectively.

Eastern Investment Limited (EIL), a subsidiary of the corporation with a 51% interest, has two further
subsidiaries: M/s Orissa Mineral Development corporation Ltd. (OMDC) and M/s Bisra Stone Lime
Company Ltd. (BSLC). These three businesses changed their status to Public Sector Undertakings on
March 19, 2010, and their headquarters are in Bhubaneswar, Odisha.

In order to meet the needs of delivery requirements across the nation, RINL markets its products
through a vast marketing network that includes 23 Branch Sales Offices and Stock Yards and 5 Regional
Offices.

Forged Wheel Plant (FWP) was established by RINL at Lalgunj, Uttar Pradesh, to meet the import
substitution needs of Indian Railways. The project is now in the testing/trial run phase.

Capital Structure: RINL-VSP is a wholly owned Government company under the administrative control
of Ministry of Steel. The authorized share capital of the company is Rs. 8000 crore and
issued/subscribed/fully paid-up share capital is Rs. 4889.85 crore as on 31.12.2021 .

Financial Performance: RINL reported a revenue of Rs. 19,401 crore (Prov.) from April 2021 to
December 2021, and the company generated a net profit of Rs. 790 crore (Estimated) through
December 2021, compared to a net loss of Rs. 1,839 crore during the same period the previous year
(CPLY). Production, sales, and contribution margin all saw increases during this time period.

Production Performance:

Production 2019-20 2020-21 2021-22*

Hot Metal 5.161 4.682 4.428
Crude Steel 4.759 4.302 4.010
Saleable Steel 4.452 4.163 3.885
*Provisional upto December, 2021

28
Raw materials: Iron ore and coking coal are two important raw commodities for which RINL lacks
captive mines. The company has mostly purchased iron ore from NMDC, with some purchases coming
through auctions or tenders. The majority of coking coal is purchased from foreign vendors.

Manpower: The number of employees at RINL as of December 31, 2021, was 15928 (Executive 5258
and Non-Executive 10670), a loss of 786 employees .

NMDC Ltd.

The primary activity of NMDC Limited, a "Navratna" CPSE under the Ministry of Steel of the Government
of India, is the exploration and development of mines for the production of raw materials for the
industry. Additionally, it is extending its operations into the production of steel and other value-added
goods.

Since its incorporation on November 15, 1958, NMDC has actively contributed to the growth of the
country for 60 years and has gotten stronger as it has progressed towards creating the country. From a
corporation with a single product and one client, NMDC has developed into a significant iron ore
supplier to the local steel industry.

The nation's two largest mechanised iron ore mines, located in Bailadila (Chhattisgarh) and Donimalai
(Karnataka), are run by NMDC. The NMDC's diamond mine is located in Panna, Madhya Pradesh; its
sponge iron unit is at Paloncha, Telangana; and its 1.2 mt capacity pellet plant is located in Karnataka.

Capital Structure: The company's authorised share capital is 400 crore rupees. As at 31.12.2021, the
paid-up equity share capital was Rs. 293.07 crore, of which 60.79% was owned by the Government of
India and 39.21% by various financial institutions, banks, individuals, and workers, among others .

Financial Performance: The Company's revenue for the fiscal year 2021–2022 (through December
2021) was Rs. 19,179 crore. The year's post-tax net profit was $7,583 billion (provisional to December
2021).

Production Performance:
The details of the actual production are given below:

Items 2019-20 2020-21 2021-22*

Iron ore (in MT) 31.49 34.15 28.33
*Actual upto December, 2021

Manpower: The manpower strength of MOIL as on 31.12.2021 was 5802.

29
 MECON Ltd.
One of the top multidisciplinary design, engineering, consulting, and contracting firms in the fields of
metals and mining, energy (power, oil & gas), infrastructure, environmental engineering, and other
related/diversified areas with extensive international experience is MECON Limited, a Miniratna CPSE
under the Ministry of Steel. From concept through commissioning, MECON offers all necessary services
for setting up Greenfield and Brownfield projects, including turnkey execution. MECON is a business that
has received ISO 9001 accreditation and is registered with several international financial institutions,
including the World Bank, Asian Development Bank, African Development Bank, European Bank of
Reconstruction & Development, and United Nations Industrial Development Organisation. In order to
address the problems brought about by the altered business environment, MECON has also entered into
additional fields of business with strategic partners.

Capital Structure: As of December 31, 2021, the Company's authorised and paid-up share capitals were
Rs. 300.00 crore and Rs. 237.33 crore, respectively. On December 15th, 2010, MOIL was admitted to
trading on the National Stock Exchange and the Bombay Stock Exchange. Governments of India, Madhya
Pradesh, and Maharashtra now hold 53.84%, 5.40%, and 5.11% of the company's shares, respectively,
with the public owning the remaining 35.65%.

Financial Performance:

Parameter 2019-20 2020-21 2021-22*

Turnover 561.17 718.00 280.10
Operating Profit 38.68 (25.34) (106.37)
PBT 87.03 19.11 (82.27)
PAT 69.00 6.24 (82.27)
*Provisional up to December, 2021

Production Performance:

Parameter 2019-20 2020-21 2021-22*

Manganese Ore 12.77 11.43 8.59
(Lakh Metric Tonne)
E.M.D. (Metric Tonne) 925 1070 879
Ferro Manganese (Metric Tonne) 10421 8851 7618
*Provisional up to December, 2021

Manpower:
The manpower strength of MOIL as on 31.12.2021 was 5802.

30
 MSTC Ltd.

On September 9, 1964, in Kolkata, MSTC Limited was established as "Metal Scrap Trade Corporation
Limited" in accordance with the rules of the Companies Act, 1956. In 1982–1983, MSTC Limited became
a PSU. Up until February 1992, it served as the import canalising agency for sponge iron, hot briquetted
iron, and re-rollable scrap. Additionally, it served as the agency for canalising the import of discarded
ships. These imports were decanalized beginning in August 1991. Later, the business expanded its
offerings to include mostly e-auction and e-procurement services. For government agencies, PSUs, and
private businesses, the company handles disposal of ferrous and non-ferrous scrap that arises, surplus
inventory, condemned plants, minerals, agricultural and forestry products, etc. The Trading Division
sources industrial raw materials in bulk both domestically and internationally for both end users and
traders. On behalf of clients in the steel, oil and gas, and power industries in the private and public
sectors, this division handles the sourcing, acquisition, and sale of industrial raw materials such low ash
metallurgical coke, HR coil, naphtha, crude oil, coking coal, steam coal, line pipes, etc. The Company's
principal pursuits include:

E-commerce : For different Central/State Government Departments and other private entities, MSTC
serves as a stand-alone and impartial e-commerce service provider under this line of business to ensure
transparent and equitable sale and buy transactions. As the only PSU in this industry area with fully
internalized operations, MSTC has developed into the biggest government company in India's e-
Commerce sector.

Recycling: The first mechanized auto shredding facility in India has been established by MSTC to handle
scrap from End-of-Life Vehicles (ELV). Mahindra MSTC Recycling Private Limited is a joint venture
company that has been established. Greater Noida's first collection and dismantling facility for end-of-
life vehicles (ELVs) has already operated for two full years. The second facility of the company, which is
in Chennai, started operating in February 2020. In Pune, a new facility has begun operating. In the
upcoming year, the company intends to build comparable plants in Indore, Ahmedabad, Hyderabad, and
Kolkata.

Capital Structure: As on 31-12-2021, the Authorized Capital of the company is Rs.150.00 crore and paid-
up Capital is Rs.70.40 crore. Government of India holds 64.75% shareholding and the balance 35.25%
shareholding is held by the public and others.

Physical Performance:

Parameter 2019-20 2020-21 2021-22*

E-Commerce 126238.91 128796.31 105000.98
Trading 1152.32 189.59 326.85
Total Volume of Business 127391.23 128985.90 105327.83

31
Financial Performance:

Parameter 2019-20 2020-21 2021-22*

Turnover 830.71 427.75 411.50
Operating Profit 131.53 117.16 133.84
Profit Before Tax 129.49 114.68 131.34
Profit After Tax 75.20 101.07 85.39
*Provisional upto December, 2021

Manpower: The manpower strength of MSTC as on 31.12.21 was 318.

KIOCL Ltd.

KIOCL Limited, a Schedule-A, Mini Ratna Category-I CPSE under the Ministry of Steel, was established on
April 2, 1976, with the purpose of mining and beneficiating low grade magnetite iron ore from the
Kudremukh Iron Ore mine in the Chickmagaluru District of Karnataka State. 99.03% of its stock is owned
by the Indian government. The company now operates a 3.5 MTPA pelletization plant and a 0.216 MTPA
mini-blast furnace unit in Mangaluru as part of its manufacturing operations for the production and sale
of foundry grade pig iron and iron ore pellets. At Mangaluru, the Company had its own captive berth and
ship loading facilities. The production facilities have received ISO 9001:2015, ISO 14001:2015, and ISO
45001:2018 accreditation.

The Blast Furnace Unit's operations were put on hold as of August 5, 2009 due to the production of
negative contribution. To keep its operations sustainable, the company is building additional production
facilities as forward and backward integration to the existing blast furnace unit, specifically the coke
oven plant and the ductile iron spun pipe (DISP) plants.

The company offers operation and maintenance services as part of its diversification efforts.

KIOCL has been approved as an exploration entity under the Mines and Minerals (Development and
Regulation) Act 1957 by the Ministry of Mines, Government of India. As a result, the Company has
entered the sector of national mineral deposit exploration.

In a letter dated February 27, 2020, the Ministry of Environment, Forests, and Climate Change of the
Government of India granted environmental clearance for the construction of a non-recovery coke oven
plant in Mangalore that will produce 0.18 MTPA of ductile iron spun pipe (DISP) and 10MW of cogen
captive power. The major packages are the subject of global tenders from KIOCL.

32
In accordance with Section 17A (2) of the MMDR Act, 1957, the Government of Karnataka reserved a
470.40 ha Iron Ore Block in Devadari Range, Sandur Taluk, and Bellary District in favour of KIOCL on
January 23, 2017. KIOCL has started taking steps to get the necessary approvals from authorities to
execute the mining lease deed. By letter dated June 24, 2021, the Ministry of Environment, Forest and
Climate Change (Forest Conservation Division), Government of India, communicated its Stage-I / in-
principle approval under the Forest (Conservation) Act, 1980 for the diversion of 401.5761 hectares of
forest land for iron ore and manganese ore mining in the Devadari Hill Range in favour of KIOCL Limited.

Physical Performance:

Particulars 2019-20 2020-21 2021-22*

Production of Iron Ore Pellets 2.375 2.210 1.385
Sales of Iron Ore Pellets 2.356 2.311 1.261

*Provisional upto December, 2021

Financial Performance:

Particulars 2018-19 2019-20 2020-21 2021-22*

Revenue from Operations 1,887.71 1,937.65 2,383.61 1868
Profit Before Tax 184.12 63.68 410.23 102.64
Profit After Tax 111.86 43.48 301.17 76.81
*Provisional upto December, 2021

Manpower: The manpower strength of KIOCL as on 31.12.21 was 709.

Ferro Scrap Nigam Ltd. (FSNL)

The paid up capital of FSNL, a fully owned subsidiary of MSTC Ltd., is Rs. 3200 lakh. Plants all around
India are receiving the specialised services of FSNL for managing scrap and slag. The primary goal of
FSNL is to create "Wealth from Waste" by recycling the scrap and slag produced as a byproduct of the
iron and steel manufacturing process. In addition to preserving the nation's priceless natural riches,
FSNL also helps to preserve the environment. Additionally, the business offers steel mill services
including managing hot slag pits and scarfing of slabs.

33
With its registered and corporate headquarters in Bhilai, Chhattisgarh, FSNL is a multi-locational
corporation that currently offers services at SAIL in Rourkela, Burnpur, Bhilai, Durgapur, Salem, RINL in
Vishakhapatnam, and Arcelor Mittal Nippon Steel India Ltd. in Hazira and Midhani –Hyderabad

Physical Performance:

Item 2019-20 2020-21 2021-22*

Recovery of scrap 48.59 34.37 27.36
(lakh metric tonne)
Market Value of Production 4275.94 3024.79 2407.64
(Rs. in crore)
*Provisional upto December, 2021

Financial Performance:

Item 2019-20 2020-21 2021-22*

Total Turnover i.e, Service Charge realized 40989.64 36496.85 30585
including misc. Income, etc.
Gross Margin Before Interest & Depreciation 6186.21 4851.82 5444
Interest & Depreciation 1584.53 1645.33 1205
Profit Before Tax 4601.68 3206.49 4239
Profit After Tax 3058 2275 3172
*Provisional upto December, 2021

EIL, OMDC and BSLC

Eastern Investments Limited (EIL), a Rashtriya Ispat Nigam Limited (RINL) subsidiary, is a government-
owned enterprise that reports to the Ministry of Steel. Two mining businesses, OMDC and BSLC, are
held by EIL, an investment firm, which also serves as their holding company.

Financial Performance:

Parameter 2021-22*
Total Income 0.78
Expenditure 0.36
Profit Before Tax (PBT) 0.42
Profit After Tax (PAT) 0.33
*Provisional upto December, 2021

The Orissa Minerals Development Company Limited (OMDC)

34
A mining business called The Orissa Minerals Development business Limited (OMDC) operates mines in
District Keonjhar, Odisha, where it produces and sells iron and manganese ore. With effect from March
19, 2010, OMDC became a step-down subsidiary of RINL and a Schedule "B" PSU under the Ministry of
Steel.

Financial Performance:

Description 2020-21*
Income 77.54
Expenditure 59.99
Profit Before Tax (PBT) 17.55
Profit After Tax (PAT) 14.05
*Provisional upto December, 2021

The Bisra Stone Lime Company Limited (BSLC): The Bisra Stone Lime firm Limited (BSLC) is an
Odisha-based mining firm that operates mines in the District of Sundargarh and produces and sells
limestone and dolomite. With effect from March 19, 2010, BSLC became a step-down subsidiary of RINL
and a Schedule 'C' PSU under the Ministry of Steel.

Physical Performance

Production 2020-21*
Limestone 54,871
Dolomite 9,16,092
Despatch
Limestone 3,869
Dolomite 8,94,825
*Provisional upto December, 2021

Financial Performance:

Description 2020-21*
Income 84.62
Expenditure 77.72
Profit Before Tax (PBT) 5.95
Profit After Tax (PAT) 5.8

*Provisional upto December, 2021

35
 PRIVATE SECTOR
Introduction
The country's steel industry is now growing and producing at a significant rate thanks in large part to the
private sector. Large-scale steel manufacturers and comparatively smaller and medium-sized units
including sponge iron plants, mini-blast furnace units, electric arc furnaces, re-rolling mills, cold-rolling
mills and cooling units are both included in the private sector units. They not only contribute
significantly to the manufacture of primary and secondary steel, but they also significantly enhance its
quality, innovation, and cost-effectiveness.

The leading steel producers in the private sector with their given capacities are given in the table below:

S.No. Name of Steel Company Existing Capacity for 2021-22

(in MTPA)
1. Tata Steel Ltd. 23.00
2. JSW Steel Ltd. 19.40
3. Arcelor Mittal Nippon Steel India Ltd. 9.60
4. Jindal Steel and Power Ltd. 8.00
5. ESL Steel Ltd. 1.88
6. Jindal Stainless Ltd. 1.10
7. Jindal Stainless (Hisar) Ltd. 0.78
Source: JPC

Note: Figures as provided above are provisional in nature and subject to revision upon data finalization by JPC. These
figures may vary with the figures reported by the respective company.

TATA STEEL GROUP

With offices in Mumbai, Maharashtra, and Jamshedpur, Jharkhand, Tata Steel Limited is a global Indian
steel manufacturer. It belongs to the Tata Organisation. ata Steel, formerly known as Tata Iron and Steel
Company Limited (TISCO), is one of the major producers of steel in the world, with an annual capacity of
34 million tonnes of crude steel. With activities and a global commercial presence, it is one of the most
geographically diverse steel manufacturers in the world. In the fiscal year that ended on March 31, 2020,
the group reported a consolidated revenue of US$19.7 billion (excluding SEA activities).

With an annual production capacity of 33 million tonnes of crude steel, the Tata Steel Group is one of
the top steel producers in the world. With activities and a global commercial presence, it is one of the
most geographically diverse steel manufacturers in the world. In the fiscal year that ended March 31,
2021, the group had a combined revenue of Rs. 1,56,294 crore. The World Economic Forum named Tata
Steel's Jamshedpur facility a Global Lighthouse in 2021. The current capacity of Tata Steel Ltd. is 14
million tonnes. Total production capacity for Tata Steel in India is 20.6 million tonne, including Tata Steel
BSL Ltd. and Tata Steel Long Products Ltd.

36
JSW Steel Ltd.
One of the leading integrated steel companies in India, JSW Steel Ltd., has an installed capacity of 28
MTPA and wants to expand both domestically and internationally. With a 12 MTPA capacity, JSW Steel's
production facility at Vijayanagar, Karnataka, is the biggest single site steel-producing facility in India.
While setting the groundwork for long-term growth, the Company has been at the forefront of cutting-
edge research, innovation, and technology that is state-of-the-art. To provide high-value special steel
products for numerous applications throughout the construction, automotive, appliance, and other
sectors, strategic partnerships with global technological leaders are being formed.

37
Arcelor Mittal Nippon Steel, India (AM/NS India)
A joint venture between Arcelor Mittal and Nippon Steel called AM/NS India was founded in December
2019 and has a 10 million tonne yearly capacity as of now. From iron ore to finished goods, AM/NS India
is an integrated flat carbon steel manufacturing. The corporation has production sites across India for
producing steel, iron, and downstream products. AM/NS India prides itself on being a trustworthy and
dependable steel supplier to clients in India and beyond by providing more than 300 grades of steel, all
of which adhere to international quality requirements. Indian and international industry organisations
have recognised their goods. The corporation also has sizable iron ore pelletization plants, with a 20
million tonne annual capacity at the moment.

Jindal Steel & Power Limited

An industrial behemoth and one of the pioneers in the Indian steel sector with a substantial
international footprint is Jindal Steel & Power Limited. It has the biggest coal-based sponge iron factory
in the world and is heavily involved in the domestic mining, infrastructure, and electricity industries. The
geographic reach of the company includes the Middle East, Asia, Africa, and Australia.

The company uses backward and forward integration to create steel and electricity that is affordable
and effective. The Company's product line includes a wide range of long goods and rails, as well as the
widest flat products available in the steel value chain. The JSPL has a blast furnace with a volume of
4554 m3, a 2.75 MTPA new electric oxygen furnace (NEOF), an advanced plate mill that can produce
plates up to 5 metres wide—the widest ever constructed in India—a 9 MTPA pelletization complex, a
DRI plant that runs on synthetic gas, a coal gasification plant for making steel using Swadeshi coal, and a
2.4 MTPA rebar mill.

Vedanta (ESL Steel Ltd.)

A Vedanta Group Company and Integrated Steel Producer, ESL Steel Ltd. (formerly known as Electrosteel
Steels Limited) was established in 2006 as a Public Limited Company with operations in Bokaro,
Jharkhand, India. The administration of ESL was taken over by Vedanta Limited in June 2018 thanks to
the Corporate Insolvency Resolution Process. The firm now has a 1.88 MTPA yearly capacity. Sinter
Plants, Coke Ovens, Blast Furnaces, Oxygen Plants, Basic Oxygen Furnaces, Billet Casters, Wire Rod Mills,
Bar Mills, Ductile Iron Pipes Plants, and a Power Plant are the main components of the plant. The
company offers TMT Bars, Wire Rods, Ductile Iron Pipes, Pig Iron, and Billets among its product offerings.

38
Jindal Stainless Limited (JSL)
The largest producer of stainless steel in India is Jindal Stainless Limited (JSL), which has an annual
capacity of 1.1 million tonnes. It is situated in the state of Odisha on India's eastern coast. The industrial
facility has world-class technology and equipment and can produce 2,50,000 tonnes of ferro alloys
annually. The complex has a 264 MW captive power generation unit and can produce up to 3.2 million
tonnes of stainless steel annually. The Jajpur complex also runs an Inland Container Depot (ICD) with a
rail connection that can move 4,500 big containers of commodities and raw materials.

Jindal Stainless (Hisar) Limited (JSHL)

With a 0.8 mtpa capacity, JSHL is a fully integrated stainless steel mill. In addition, it is India's largest
maker of currency blanks and the world's largest producer of stainless steel strips for razor blades,
meeting the demands of both Indian and foreign mints. Modern specialised Product Division (SPD) of
JSHL satisfies prestigious Indian and foreign clients' high-end precision and specialised stainless steel
needs. The product line consists of cold rolled coils, hot rolled coils, strips, plates, coin blanks, precision
strips and blooms and slabs of stainless steel. For the Defence industry, JSHL also produces high-
nitrogen steel, which increases material efficiency in armour applications.

39
3. ORGANISATIONAL STRUCTURE AND FUNCTIONS OF MINISTRY OF STEEL
3.1 Introduction
The Minister of Steel is in charge of the Ministry of Steel, and the Minister of State for Steel provides
assistance. The Ministry is in charge of the development and planning of the iron and steel industry, as
well as other associated tasks. These tasks include the development of vital inputs such iron ore,
limestone, dolomite, manganese ore, chromites, ferro-alloys, sponge iron, etc. The Annexure-I contains
information about the subjects assigned to the Ministry. Annexe II contains information about the
officials up to the rank of Deputy Secretary and the Minister-in-Charge. As of December 31, 2021, 190 of
the Ministry of Steel's 246 authorised workers were still working there.

3.1.1.Key Functions of the Ministry of Steel

1. Encouraging the construction of the infrastructure needed to increase domestic steel production.

2. To make it easier for the steel industry to get enough domestically and internationally sourced raw
materials.

3. Establishing and maintaining an extensive data repository for various steel industry areas.

4. To keep tabs on the capital investment in projects and the physical and financial performance of
CPSEs.

5. Monitoring the fulfilment of the MOU obligations and the CPSE modernization and expansion plans.

6. Enable the iron and steel sector to function better by using technology, improving quality control, and
altering techno-economic factors.

7. Increasing domestic steel demand through marketing initiatives, 2021.

3.1.2.Key Divisions

The Ministry has 34 sections dealing with various subjects. The key divisions include Board Level
Appointments, Coordination, International Cooperation, Raw Materials, Technical Division, Steel
Development (Institutes), SAIL, MF, NMDC, MECON, RINL, KIOCL, MOIL, Trade and Taxation, Make in
India (Industrial Development).

40
3.2 Other Related Organisations of the Ministry of Steel
3.2.1 Joint Plant Committee(JPC)
The Joint Plant Committee (JPC), which holds ISO 9001: 2015 certification, is the only organisation in the
nation that collects data on the Indian iron and steel industry under the auspices of the Ministry of Steel,
Government of India. As a result, a comprehensive and impartial databank on this industry has been
created and is maintained. Via regional and extension offices that are active in data collecting, JPC,
which has its headquarters in Kolkata, is present across all of India.

With representatives from the Government of India, steel companies, steel associations, and other
organisations among its valued Members, JPC is currently presided over by Additional Secretary to
Government of India, Ministry of Steel. JPC carries out the following duties:

 Collection of production, stock and raw material data from the producers.
 Collection of domestic retail market prices from four metros.
 Collectionofemergingdataitemslikeretailpricesfromsteelclusters,employmentdata,etc.
 Regular follow-up, monitor ingand related liaison activities with industry.
 Visitto defaulting steel producing units for on-spot data collection.
 Active role in field level collection duringsegmentsurveys.
 OrganizationalsupporttoseminarsandexhibitionsincludingMinistryofSteeleventssuchasSteelConsumers’Counc
ilmeetings,SecondarySteelSectorawardsamongothers.

The dissemination of information and data to all industry stakeholders is ensured via a variety of publications
and data reports, both on a monthly and annual basis. Access to data in real time for all stakeholders is
ensured through a dynamic website with an online query module and a mobile app.

A division of JPC in New Delhi called the Economic Research Unit (ERU) supports research, forecasting
exercises, policy analysis, and techno-economic studies.

ListofPublicSectorUnitsundertheadministrativecontroloftheMinistryofSteel:

Sl. NameoftheCompany Headquarters MajorSubsidiaries

No.
1. SAIL IspatBhawan,LodiRoad,N SAILRefractoryCo.Ltd.
ew Delhi - 110003 PostBagNo.565Salem-
636005(TN)
2. RINL AdministrativeBuilding,Visakhapatnam EIL,OMDCandBSLCC/o
-530031(AndhraPradesh) SAIL Office, Ground
Floor,Plot No. 271,
BidyutMarg,ShastriNagar,U
nit-IV,

41
 Bhubaneswar,Odisha-751001
3. NMDCLtd. KhanijBhawan,10-3-311/
A,CastleHills,MasabTank,Hyderabad-
500028(Telangana)
4. MOILLtd. MOILBhawan,1-
A,KatolRoad,Nagpur-
440013(Maharashtra)
5. MSTCLtd. MSTC Ltd., Plot No. CF-18/2, Ferro ScrapNigamLtd.,
StreetNo.175, Action Area 1C, New (FSNL)FSNLBhawan,EquipmentCh
Town,Kolkata-700156 owk,CentralAvenue,Bhilai-
490001(Chhattisgarh)
6. MECONLtd. MECONBuilding,Ranchi-
834002(Jharkhand)
7. KIOCLLtd. II Block,
KoramangalaBengaluru-
560034(Karnataka)

3.2 THE INDIAN STEEL SECTOR: PROGRESS AND POTENTIAL

3.2.1 Introduction
Only three steel mills—the Tata Iron and Steel Company, the Indian Iron and Steel Company, and
Visveswaraya Iron and Steel Ltd.—as well as a few electric arc furnace-based plants existed in India at
the time of its independence in 1947. Hence, up until 1947, the nation had a modest but functional steel
industry that functioned with a capacity of around 1 million tonnes and was entirely private. India has
advanced from its early one million tonne capacity position to become the world's second-largest
producer of crude steel and the top producer of sponge iron. The Indian steel industry, which had a little
worldwide footprint before, is today known across the world for the high quality of its products. The
Indian steel industry has adapted to the difficulties of business cycle highs and lows throughout its
lengthy history since independence. The first significant shift occurred during the first three Five-Year
Plans, when the iron and steel industry was designated for state control in accordance with the then-
prevailing economic order. Large integrated steel factories were built by the Indian government in the
public sector in Bhilai, Durgapur, Rourkela, and Bokaro between the mid-1950s and the early 1970s. The
industry was subject to the following policy regime throughout these years:

 Capacity control measures: Licensingofcapacity,reservationoflarge-

scalecapacitycreationforthepublicsectorunits.
 Adual-pricing system: Priceanddistributioncontrolfortheintegrated,large-
scaleproducersinboththeprivateandpublicsectors,whiletherestoftheindustryoperatedinafreemarket.
 Quantitative restriction sand height ariffbarriers.
 Railway freight equalization policy: Toensurebalancedregionalindustrialgrowth.
 Controlsonimportsofinputs,includingtechnology,capitalgoodsandrestrictionsonfinancesandexports.

42
3.2.2 Although crude steel output increased significantly during this time, from just 1 million tonnes in 1947 to
over 15 million tonnes in just ten years, the public sector's large-scale capacity building during these years helped
India become the tenth largest steel manufacturer in the world. The trend, however, was unable to continue
beyond the late 1970s because the Indian steel industry's growth rate was negatively impacted by the economic
downturn. As the nation replaced the control regime with liberalization and deregulation in 1991–1992, this phase
was, however, reversed. The following effects of the New Economic Policy's provisions, which were implemented at
the beginning of the 1990s, were felt by the Indian steel industry:

1. Industries with large-scale capacity were taken from the list of ones that belonged to the public sector. Subject to
geographic limitations, the license need for extra capacity was also removed.

2. The private sector started to take center stage in the overall setup.

3. Controls over pricing and distribution were removed.

4. The iron and steel sector was added to the high priority list for foreign investment, which meant that foreign equity
involvement up to 50% was automatically approved, subject to the foreign exchange and other restrictions that apply
to such ventures generally.

5. A system of freight ceilings was introduced to replace the freight equalization method.

6. The majority of the quantitative import limitations were lifted. Export limitations were lifted.

3.2.3For manufacturers of steel, the opening up of the economy created new avenues for obtaining
their inputs at cost-effective prices from foreign markets as well as new consumers for their goods. Also,
it made data on international industrial processes and practises more widely available. The necessity to
raise efficiency levels in order to compete worldwide rose as a result of this and the challenges of a
competitive global market. The steel consumer, on the other hand, now had a wide range of options to
pick from, whether they were locally produced or imported. As the economy was opened up in 1992,
the nation's capability for producing steel expanded quickly. Essar Steel, Ispat Industries, and the Jindal
Group all built sizable integrated steel facilities in the private sector.Tata Steel also expanded its
capacity. Some of the notable milestones in the period included the following:

 Emergence of the private sector with the creation of around 9 million tonne of steel capacity based on state-of-
the-art technology.
 Reduction/ dismantling of tariff barriers, partial float of the rupee on trade account, access to best-practice ofglobal
technologies and consequent reduction in costs – all these enhanced the international competitiveness of
Indians steel in the world export market.

3.2.4 The Indian steel industry's growth rate slowed after 1996–1997 as a result of the persistent
reduction in the domestic economy's growth rate, and the sector's performance decreased across all
performance measures, including capacity expansion, production, consumption, exports, and
price/profitability. Due to non-tariff obstacles used by the majority of industrialized nations, Indian steel
was also subject to anti-dumping and safeguard tariffs in international commerce.

43
The Asian financial crisis, a downturn in the global economy, and the impact of a glut brought on by
increased supply from newly active steel-producing nations (the steel-surplus economies of the former
USSR), all contributed to lower growth rates. Yet starting in 2002, the global economy began to recover,
greatly aided by China, whose remarkable economic development and quickly growing infrastructure
caused a surge in demand for steel that its domestic production could not keep up with. At the same
time, key markets saw recoveries, as evidenced by an increase in production, a rebound in pricing, a
return to profitability, the formation of new markets, the removal of trade restrictions, and eventually,
an increase in steel demand on a worldwide scale. The situation was the same for the Indian steel
industry, which by this point had reached a certain level of maturity. It placed a strong emphasis on
intensive R&D activities, adopted policies to increase domestic per capita steel consumption, and other
market development projects. It also put a strong emphasis on import substitution policies, promoted
exports, and looked into international opportunities.

3.2.5Some rules and structure were required due to the industry's rapid expansion and the tendencies
in the market. Hence, the idea for the National Steel Policy emerged, with the intention of offering a
blueprint for the expansion and development of the Indian steel sector. The National Steel Policy (NSP),
a fundamental roadmap for the development of an independent and internationally competitive steel
sector, was unveiled in November 2005. The long-term goal of the National Steel Policy of 2005 was to
make sure that India had a world-class, modern, and effective steel sector that could meet a variety of
steel demand. The policy's main objective was to reach levels of global competitiveness in terms of
productivity and efficiency standards set globally. It was believed that the NSP 2005 needed to evolve
along with the passing of time and the local steel industry's ongoing expansion. In light of this, and with
a goal of developing a technologically cutting-edge and globally competitive steel industry that fosters
economic growth, the government has published the National Steel Policy 2017, which lays out a broad
roadmap for encouraging long-term growth for the Indian steel industry, both on the demand and
supply sides, by 2030–31. In addition, the government has adopted a policy to provide priority to
domestically manufactured iron and steel products (DMI&SP) in government procurement as a
facilitator in the current deregulated, liberalized economic and market climate. This policy seeks to
accomplish Hon’ble Prime Minister’s vision of ‘Make in India’ with the objective of nation building and to
encourage domestic manufacturing. DMI&SP was last amended on 31.12.2020.

3.3 Production , Consumption and Growth of Steel

44
3.3.1The table below shows the trend in production, import, export and consumption of total finished
steel (alloy + non-alloy) in the country in the last five years:

Year TotalFinishedSteel(alloy+non-alloy)
(inMillionTonnes)
Production Import Export Consumption
2017 93.737 7.828 10.871 88.679
2018 100.574 7.295 6.692 96.737
2019 104.062 7.440 8.205 102.622
2020 92.231 4.463 10.150 89.331
2021* 111.858 5.001 12.799 106.134

3.3.2 Data on crude steel production, capacity and capacity utilization on during the last five years is give
ninth table below:-

Year Crudesteel
Capacity(MT) Production(MT) Capacity
Utilization (%)
2017 137.975 101.455 74
2018 142.236 109.250 77
2019 142.299 111.344 78
2020 143.914 100.256 70
2021* 154.269 118.134 77

CrudeSteel

180 78 85
77 77
16074 80
70 75
140 70
120 65
100 60
80 55
60 50
40 45
20 40
0 35
20172018201920202021*

Capacity(MT) Production(MT) CapacityUtilization(%)

45
1.From 101.455 MT in 2017 to 118.134 MT in 2021, steel output increased.

2. Over this five-year period, capacity growth from 137.975 Million Tonnes (MT) in 2017 to 154.269 MT
in 2021 was the primary factor driving the increase in output.

3. Domestic consumption of total finished steel (alloy and non-alloy) was 106.134 MT in 2021 compared
to 88.679 MT in 2017.

4.Total finished steel exports (alloy + non-alloy) in 2021 were 12.799 MT, up from 10.871 MT in 2017,
while total finished steel imports (alloy + non-alloy) were 5.001 MT, down from 7.828 MT in 2017.

5.In 2021, India exported more total finished steel than it imported.

3.2.2Theshares of the different process routes in total production of crude steel in the country during the
terminal

Years of the last five-years panares how ninthe table below

CrudesteelproductionbyProcessRoute
ProcessRoute Percentageshare(%)
2017 2021*
Basic Oxygen 45 45
Furnace(BOF)
Electric Arc Furnace(EAF) 27 27
Induction Furnace(IF) 28 28
Total 100 100

Crude Steel Production by Process Route

PercentageShare(%)2021*

Induction
Furnace (IF)28%
BasicOxygen
Furnace (BOF)45%

ElectricArc
Furnace (EAF)27%

46
3.2.3With several coal-based facilities spread across the States of the nation that are abundant in
minerals, India is also a top producer of sponge iron. The coal-based approach has become a significant
contributor throughout time, contributing 78% of the nation's total output of sponge iron in 2021. Since
2003, India has consistently produced more sponge iron than any other country in the world. The
country's entire production of sponge iron is depicted in the table below, along with the breakdown of
its production by coal and gas during the previous five years.

The following table shows the domestic pig iron availability status during the previous five years:

PigIronDomesticAvailabilityScenario(MT)
Year 2017 2018 2019 2020 2021*
Production 6.888 6.249 5.983 4.548 5.876
Import 0.016 0.067 0.013 0.007 0.015
Export 0.668 0.335 0.421 0.823 1.407
Consumption 6.205 5.841 5.669 3.735 4.506
Source:JPC;*Provisional(January-December,2021)

3.3.1. Global ranking of Indian steel

According to preliminary figures issued by the Global Steel Association on January 25, 2022, global crude
steel output for the period of January through December 2021 was 1950.5 MT, an increase of 3.7% over
the same period in the previous year. China produced 1032.8 MT of crude steel during this time, a 3%
decrease over the corresponding period in 2017. China continued to be the world's top producer of
crude steel, accounting for 53% of global output and 75% of that in the Asia & Oceania area during this
time. India, the world's second-largest producer of crude steel, saw an increase in output of 17.8%
between this time last year and the same period this year.

47
 3.3.2 World Crude Steel ProductionJanuary-December2021

Rank Country Qty(MT)* %changeoverthesamepe

riodoflastyear
1 China 1032.8 -3
2 India 118.1 17.8
3 Japan 96.3 15.8
4 USA 86 18.3
5 Russia(e) 76 6.1
6 SouthKorea 70.6 5.2
7 Turkey 40.4 12.7
8 Germany 40.1 12.3
9 Brazil 36 14.7
10 Iran(e) 28.5 -1.8
Top10 1624.8 2.09
World 1950.5 3.7
Source:WorldSteelAssociation.*Provisional‘
e’standsforestimate

Note:Thereare9countriesinAsia&OceaniaRegion–
Australia,China,India,Japan,NewZealand,Pakistan,SouthKorea,TaiwanandVietnam

3.3.2.Steel: Facts of Indian steel sectorduringtheyear2021:

MajorCrudeSteelProducing MajorCrudeSteelProducing
CountriesduringJan.-Dec.2021 CountriesduringJan.-Dec.2020
Iran1%
Total Finished Steel (alloy+non-alloy)
Brazil Qty(MT) Brazil%change**
Production 2%Iran 111.858 2% 21.3
Germany1%
Import 5.001 12.0
Others Germany Others
Export 2% 17%
12.799 2%
26.1
Turkey 15%
Consumption
2% 106.134 18.8
South Korea Turkey2%
Crude steel
4% China China
53% SouthKorea
Russia
Production 118.134 17.8 57%
4% Russia
Capacity Utilization(%) 77 4% -
4%
USA Japan USA
4% 4% JapanIndia
5%India 4%5%
6%

48
Source:JPC;*Provisional;**oversameperiodoflastyear

3.3.3 Trends in Production ,Private/Public Sector

Thefollowingtablehighlightsthecontributionoftheprivateandpublicsector incrudesteelproductioninthecountry
duringthelastfiveyears:

IndianCrudeSteelProduction
Sector Unit 2017 2018 2019 2020 2021*
PublicSector MT 19.215 21.191 21.014 18.948 22.849
Private Sector MT 82.240 88.059 90.330 81.308 95.286
TotalProduction MT 101.455 109.250 111.344 100.256 118.135
ShareofPublicSector % 18.9 19.4 18.9 18.9 19.3

49
 IndianCrudeSteelProductionbyPublicandPrivateSector
IndianCrudeSteelProductionbyPublicandPrivateSector
3.3.4 Annual
90%
Plan 2021-22
IndianCrudeSteelProductionbyPublicandPrivateSector

90%
The Ministry's
90% Annual Plan, based on the Revised Estimates for 2021–2022, is worth Rs. 13443.88 crore.
80%

This comprises
80% Gross Budgetary Support (GBS) of Rs. 4.81 crore and Internal and Extra Budgetary
70%
80%
Resources (IEBR) of Rs. 13439.07 crore, as shown in the table below:
70%
60%
70%

60% PlanOutlayforAnnualPlan2021-22
50%
60%

50%
40%
50%
Sl.No.
30% NameofthePSU/Organisation
40%
IEBR GBS Total
40%
30%
A.SchemesofPSUs
20%
30% 2017 2018 2019 2020 2021*
20% 2017 2018
PublicSector 2019
PrivateSector 2020 2021*
1. 10%
20% SteelAuthorityofIndiaLtd. 8000.00 0.00 8000.00
0%
10% PublicSector PrivateSector
2. 0%
10% RashtriyaIspatNigamLtd.
2017 2018 2019 730.00 2020 0.00
2021* 730.00
0%
3. NMDCLtd PublicSector 3720.00
PrivateSector 0.00 3720.00
4. KIOCLLtd. 653.60 0.00 653.60
5. MOILLtd. 293.71 0.00 293.71
6. MECONLtd. 12.50 0.00 12.50
7. MSTCLtd. 17.40 0.00 17.40
8. Ferro Scrap NigamLtd. 11.00 0.00 11.00
9. SAILRefractoryCompanyLtd. 0.86 0.00 0.86
Total-A 13439.07 0.00 13439.07
B.Scheme ofMinistryof Steel
10. SchemesforpromotionofR&DinIron&Stee 0.00 4.81 4.81
lSector
Total-B 0.00 4.81 4.81
GrandTotal:A+B 13439.07 4.81 13443.88

50
 4.STEEL POLICIES,RECENTINITIATIVES AND
IMPACT OF COVID-19 PANDEMIC

4.1 NationalSteelPolicy2017

NSP 2017 seeks to develop a "technologically advanced and globally competitive steel industry that
promotes economic growth" by facilitating investments and cost-effective productions with adequate
access to raw materials, increasing focus on the expansion of the MSME sector, improving raw material
security, enhancing R&D activities, reducing import dependency, and lowering production costs.

For the next ten years, there will be a strong emphasis on R&D, and MSME steel mills will be the main
forces behind achieving the increased capacity needed for India's consumption-led development and
improvement in overall productivity and quality.

Expectedimpact/outcomeofNSP2017

ThefollowingtargetshavebeensetintheNSP2017:

S.No. Parameter Projections(2030-31)

1. Total crude steel capacity(in MTPA) 300
2. Total crudesteeldemand/production(inMTPA) 255
3. Totalfinishedsteeldemand/production(inMTPA) 230
4. Sponge irondemand/production(inMTPA) 80
5. Pigirondemand/production(inMTPA) 17
6. PerCapitaFinishedSteelConsumption(inKgs) 158

Theotherexpectedoutcomesareasunder:
a) India will lead the globe in sustainability and energy efficiency
The Ministry of Steel, in collaboration with the appropriate agency, will continuously track the
technological and economic performance of all the steel factories in the nation in comparison to
international best practises. By forming JVs with global giants, the technology transfer for manufacturing
automobile steel and other specific steels would be easier.
b) A source of inexpensive, high-quality steel
145 The required quality certification mark programme of BIS has previously announced Indian
Standards for steel and steel-related goods. To guarantee the protection of human health, the
environment, and safety, efforts will be made to introduce new steel products that are utilised in crucial
end-use applications under the obligatory programme.
c) Achieve international standards for workplace safety and health

51
The Government is working with steel businesses to make sure that their staff receive on-the-job
training on maintaining a safe workplace.
d) Significantly lower the industry's carbon footprint
The Ministry is enabling the creation of a forum to outline best practises and is concentrating on
developing a Waste Management Strategy for the sector in order to solve environmental challenges.
e) Provide all of the high quality automotive steel, electrical steel, special steel, and alloys needed
domestically.

4.2 Policy for providing preference to Domestically

Manufactured Iron and Steel Products (DMI&SP Policy) in
Government Procurement

On May 8, 2017, the government announced the DMI&SP Policy, which gives precedence to locally
manufactured iron and steel in government procurement. Also, on May 29, 2019, and December 31,
2020, the Policy was updated in order to better achieve this goal. The following are the key elements of
the Policy:

1. Domestically manufactured iron and steel products (DMI&SP) are given precedence in government
procurement under this strategy.

2. A list of 49 produced iron and steel goods are covered by the policy. The guideline also includes
equipment used in the production of iron and steel products.

3. Previously, domestic content requirements for the 49 iron and steel products ranged from 15 to 50
percent; however, the new list of 49 products has minimum prescribed value addition requirements
ranging from 20 to 50 percent, making it challenging for imported steel to compete with domestic
bidders for government contracts.

4.Each Ministry or Department of Government and all agencies/entities under their administrative
control is under the purview of the DMI&SP policy as notified by the Ministry of Steel. All Central Sector
Schemes (CS)/Centrally Sponsored Schemes (CSS) for which procurement is made by States and Local
Bodies come within the purview of this Policy, if that project / scheme is fully / partly funded by
Government of India.

5. The policy is applicable to the acquisition of iron and steel products by private entities for the
performance of an EPC contract and/or any other need of a Ministry or Department of Government or
their PSUs, as well as the acquisition of capital goods for the production of iron and steel products in
accordance with the applicable quality standards.

6. Unless with the agreement of the responsible authority as specified by the Department of
Expenditure, no Global Tender Enquiry (GTE) would be sought for bids connected to the procurement of
Capital Goods for producing iron & steel products with estimated value up to Rs. 200 Crore.

52
7. The policy allows for exceptions for all such purchases when certain steel grades are not produced in
the nation or when domestic suppliers are unable to provide the required quantities for the project.

The goal of the strategy is to encourage the growth and development of the indigenous steel industry
and lessen the tendency for government-funded projects to employ low-quality, inexpensive (and
unjustly traded) foreign steel.

The Indian economy has benefited from and is anticipated to benefit greatly from this strategy, which
also limits the use of cheap and low-quality imported steel in government-funded projects while
strengthening indigenous import substitution capabilities. A total of Rs 22,400 crore worth of steel
imports have been replaced as a result of the DMI&SP Policy so far.

4.3 Steel Import Monitoring System(SIMS) for import data dissemination

A Steel Import Monitoring System (SIMS) was announced by the DGFT on September 5, 2019, and it
went into effect on November 1, 2019. The SIMS was created to ensure that prior to the entry of such
imports into India, granular data regarding steel import, such as end-use, IS grade, etc.,was available in
the public domain. For all steel tariff lines at the 8-digit HS Code level, SIMS requires the importer to
submit advance information online in order to get an automated registration number. For this reason, a
nominal registration charge has been established. Prior to being expanded to include all products
covered by Chapters 72, 73, and 86 of ITC HS codes, SIMS initially only covered 284 HS codes. The local
steel sector in India can adjust to market conditions more quickly and effectively thanks to SIMS.

4.4 Enhancing the scope of the Quality Control Order son Steel

In order to guarantee that only high-quality steel that complies with the pertinent BIS standards is made
accessible to end users, the Ministry of Steel put substantial emphasis to the Steel Quality Control Order
(SQCO) from 2015 onward. Under the Quality Control Order, 115 Indian Standards for carbon steel, alloy
steel, and stainless steel have been announced throughout the past five years. With this, 145 Indian
Standards are now protected by the Quality Control Ordinance.

As of right now, the Ministry's policy includes both raw materials and products made of steel, including
stainless steel pipes and tubes, transformer laminations and cores, products made of tin plate and tin-
free steel, etc. in the notification to stop the Steel Quality Control Order from being disregarded.

To process requests for clarification or exemption about the applicability of SQCO on a certain grade of
steel in a timely and transparent way, a dedicated portal has been built.

53
4.5 Recent Initiatives
4.5.1 Ensuring raw material security for the Steel sector
For the iron and steel sector to have continuous expansion, raw materials are a vital enabler. Regarding
the security of raw materials, including coal and iron ore, the sector confronts issues in both the short
and long term. With the various State Governments, the Ministry of Mines, and the Ministry of Coal, the
Ministry of Steel has brought up associated problems.

Iron ore
According to NSP, 2017, the Ministry of Steel has set a goal to produce 255 MT of crude steel by 2030–
31, which would require 437 MT of iron ore. This goal is to reach 300 MT of crude steel capacity. The FY
2021–22 targets for NMDC and SAIL are to increase iron ore output from 34.15 MT in the prior year to
47 MT in FY 2021–22 and from 30.06 MT to 40 MT in the current FY, respectively.

The long-running dispute over NMDC's Donimalai iron ore mine in Karnataka, which had been shut
down since November 2018, has now been resolved. On December 1, 2020, the Karnataka Government
issued an order allowing NMDC Limited to resume mining activities at its Donimalai mines in the Bellary
District of Karnataka. On February 18, 2021, mining activities at the Donimalai iron ore mine were
resumed. The country's yearly iron ore production will rise by 7 MTPA with the opening of the Donimalai
iron ore mines.

The Ministry of Steel has asked the Ministry of Mines to develop a policy to provide incentives to the
beneficiation and agglomeration industries and to give instructions to mandate the use of low-grade
fines for beneficiation and pillarization in order to move the nation towards zero waste mining, in
accordance with the recommendations of the Standing Committee on Coal and Steel. A committee at
the Indian Bureau of Mines has been established by the Ministry of Mines to investigate the problem of
"Utilization of low and lean grade iron ore deposits in the country."

Coal
Because there is a limited quantity of high-quality coal and coking coal (low-ash coal) in the nation, the
demand for coking coal cannot be completely satisfied by local production. As a result, coking coal
imports have been a major source of dependence for the Indian steel industry.

Due to the high ash level of the majority of locally produced coking coal, which rendered it useless for
the production of steel, 51.83 MT of coking coal was imported in 2019–20 and 51.20 MT in 2020–21. Up
till September 2021, 28.02 MT of coking coal have been imported during in the current fiscal year.

The Ministry of Steel is working to minimise the import bill for coking coal by diversifying the import
destinations since coking coal represents a significant cost element in the manufacture of steel,
accounting for 42% of total costs. The Minister of Steel of the Government of India and the Minister of
Energy of the Russian Federation signed a Memorandum of Understanding (MoU) on cooperation on
coking coal, which is used in the production of steel, on October 14, 2021. Due to the long-term
commitment to supply of high-quality coking coal to India, the Agreement will assist the Indian steel
sector by diversifying the sources of coking coal, which may contribute to a decrease in input costs for

54
the steel players (up to 40MT till 2035). This agreement also calls for the execution of collaborative
projects and business ventures in the coking coal sector, including the expansion of coking coal reserves
and logistics, the exchange of production management expertise, mining, beneficiation, and processing
technology, as well as training. Moreover, the Agreement plans to encourage research cooperation
between the two nations.

4.5.2 MoU with Russia

On October 14, 2021, a Memorandum of Understanding (MoU) for cooperation in the area of coking
coal, used in the production of steel, was signed between the Ministry of Steel and the Russian
Federation. Due to the long-term commitment to supply of high-quality coking coal to India, the
Agreement will assist the Indian steel sector by diversifying the sources of coking coal, which may
contribute to a decrease in input costs for the steel players (up to 40 MT till 2035).

Hon’bleUnionMinisterofSteelShriRamChandraPrasadSinghsigningtheMoUwithRussiaonbilateralcooperationinthesectorofcokingcoa
lusedinsteelmaking.

4.5.3. DRI Making through Coal Gasification in Iron & Steel Making
On September 16, 2021, a meeting was called under the chairmanship of the Hon'ble Union Minister of
Steel to discuss the opportunities and challenges of using coal gasification for iron and steel in order to
reduce reliance on imported coal and maximise use of the plentiful non-coking coal that is available in
the nation. The participants in the discussions/deliberations included specialists from the steel sector,
also including SAIL, Tata Steel, and JSPL; consultancies, such as MECON and Dasturco; and research
organisations, such as CSIR-CIMFR. Moreover, CIMFR stated that they have mapped out every coal block
in India in order to determine which blocks would be best suited for coal gasification. Although
gasification is best suited to coal with lower coal ash levels, a technology may be created to use high ash
coal in collaboration with businesses like MECON and based on the operational expertise of JSPL. The

55
conclusion of the discussion was that it is necessary to build indigenous coal gasification technology that
is appropriate for the locally generated coal. The Chair invited the stakeholders to collaborate on the
development of technologies that the steel sector could use to its advantage, lessen its reliance on
imported coal, and advance "Atmanirbhar Bharat."

4.6 Key initiatives for Atmanirbhar Bharat

4.6.1 Production Linked Incentive(PLI) Scheme for Specialty Steel

The PLI programmer for domestic specialty steel manufacturing, with a budget of Rs. 6322 crore, has
been authorized, and comprehensive rules were issued on 20 October 2021. The Plan offers incentives
in three incentive slabs (Slabs A, B, and C) with percentages ranging from 4% to 12% on additional
output in the five product categories and 19 subcategories that have been defined. Coated/plated steel
goods, high strength/wear resistant steel, specialty rails, alloy steel products, steel wires, and electrical
steel are the five major types of specialty steel specified for the plan. White goods, vehicle body and
component parts, oil and gas transportation pipes, boilers, ballistic and armor sheets, high-speed railway
lines, turbine parts, distribution transformers, and power transformers are just a few of the uses for
these steel items.This would result in an increase in capacity of 25 MT, extra investments of around Rs.
40000 crore, and the creation of 5.25 lakh jobs, of which roughly 68,000 will be direct jobs and the
remainder indirect jobs.

Hon’bleUnionMinisterofSteelShriRamChandraPrasadSinghattheseminaronPLISchemeforSpecialtySteel,aimedatbolsteringAtmanirbharB
haratinitiativeintheSteelSectoratNewDelhi.

56
4.7 Other Key Highlights
4.7.1 CAPEX: In order to lessen the negative impacts of the COVID-19-induced downturn in economic
activity and to revive the economy, the government is giving capital expenditure (CAPEX) high priority.
CPSEs undertake capital expenditure (CAPEX) either out of their own funds or with government funding
(GBS). All of the internal and extra budgetary resources of the CPSEs under the Ministry of Steel are used
to pay for CAPEX (IEBR). The CAPEX for the Steel CPSEs in FY 2020–21 was Rs. 7,215.96 crore. The
Ministry of Steel's CPSEs have an increased CAPEX goal for the current fiscal year (FY 2021-22) of Rs.
13,302 crore (BE).

4.7.1.1:  Given the significance of CAPEX in boosting infrastructure and production capacity in the post-
pandemic period and the noticeably higher objectives established for CAPEX for the current year as
compared to the previous year, the Ministry frequently monitors CAPEX with the CPSEs. The CMDs of
SAIL, NMDC, RINL, KIOCL MOIL, and MECON, as well as top executives from the Ministry of Steel, are
assessing the status of CAPEX projects of the Steel CPSEs with the Union Steel Minister. The Steel CPSEs
have been told to speed up their CAPEX and set daily goals for careful monitoring and time-bound
project implementation. The accomplishment of these goals will inspire employees, increase India's
output of steel, and promote faster growth. He has additionally instructed CMDs to step up efforts to
ensure that milestones are met in a timely manner in order to meet project objectives for the years
2021–2022.

4.7.1.2 : The Ministry routinely monitors CAPEX with the CPSEs due to the significance of CAPEX in
reinforcing infrastructure and increasing production capacity in the post-pandemic era as well as the
much higher objectives established for CAPEX for the current year as compared to the previous year.
With the CMDs of SAIL, NMDC, RINL, KIOCL MOIL, and MECON as well as top executives from the
Ministry of Steel, the Union Steel Minister is examining the status of the CAPEX projects of the Steel
CPSEs. The Steel CPSEs have been given instructions to accelerate their CAPEX and set daily goals for
careful monitoring and time-bound project execution. The accomplishment of these goals will inspire
employees, increase India's output of steel, and promote faster growth. Also, he has instructed CMDs to
step up their efforts to guarantee that there are no delays in completing milestones in order to meet the
project's goals for the years 2021–2022.

4.7.1.3 The Ministry is resolving the inter-ministerial concerns for quicker execution of CAPEX projects by
the CPSEs in addition to encouraging and instructing the steel CPSEs to speed up CAPEX. The development of
their CAPEX has also been frequently reported to the Board of Directors of Steel CPSEs.

57
 4.7.1.4. TheCPSE-wiseCAPEXprogressisasfollows:

Actual BE20 Exp.upto

S.No. CPSE
In2020- 21-22 31January,2022
21
1. SAIL 4283.00 8000.00 4869.00
2. NMDC 2031.00 3720.00 1670.00
3. RINL 737.37 595.00 575.17
4. MOIL 136.66 293.50 176.47
5. KIOCL 41.05 653.60 262.60
6. Others 37.62 39.90 32.76
Total 7266.70 13302.00 7586.00

4.7.2 Facilitation of NIP Projects

Through meetings of the Inter-Ministerial Steering Committee (IMSC), the Ministry of Steel has
been proactive in bringing up issues relating to National Infrastructure Pipeline projects of steel
companies with concerned Central/State Government, Ministries/Departments. Three IMSC
meetings were held in 2021 to address issues.

4.7.3 GEM

Steel CPSEs have boosted their use of GeM dramatically over the last year, with the value of orders
placed from April through November 2021 being 4943.14% larger than it was in CPLY. The following
information pertains to Steel CPSEs' purchases of products and services from CPLY during the current
fiscal year up until November 21 via the GeM Portal:

April-November,2020 April-November,2021
Organization No.ofOrders Value of No.ofOrders Value of
orders(Rs.incr orders(Rs.incr
ore) ore)
SteelCPSEs 2116 72.15 7068 3638.63

4.7.4 MSME Payments: Weekly checks are made to see how much money is still owed to MSMEs by CPSEs
of the Steel Ministry in order to make sure that it is credited promptly and well within the 45-day
window allotted for such payments, with 97.4% of those made between April and November of the
current fiscal year being made within 30 days. A payment of Rs. 3358.61 crore was provided to MSMEs
by Steel CPSEs between April and November 2021, which is 64.5% more than the payment of Rs.
2041.61 crore made during CPLY.

58
 4.8 COVID-19 Response

 Supply of Liquid Medical Oxygen(LMO) by Steel companies: During the second wave of COVID-19,
the steel industry stepped up to the plate to fulfill the country's LMO need. From 1 April 2021 to
12 December 2021, the steel factories distributed 2.96 lakh tones of LMO to 22 States. The
availability of LMO from the steel factories reached a peak of 4749 tonson May 13, 2021 from a
meager 538 tonne on April 1, 2021. In order to increase the production of LMO and save
thousands of priceless lives, steel factories in both the public and commercial sectors adopted
aggressive measures to decrease production of liquid nitrogen and liquid argon. In order to
make sure that the surplus gaseous oxygen, which would otherwise be utilized to make steel, is
transformed into LMO to the greatest degree possible and made available to the Covid patients,
the steel mills even lowered their output.

 Jumbo Covid Care facility :5378 beds have been put up as part of Jumbo Covid Care Facilities
employing gaseous oxygen surrounding steel factories until December 2021 in order to relieve
the strain on the already overburdened hospital infrastructure and further lessen the need on
LMO for Covid patients. This has significantly reduced the requirement for oxygen and improved
the availability of medical resources during the Covid epidemic.

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