Addressing the Steel Summit 2014 organised by the Confederation of Indian Industry (CII), the Minister informed that discussions are already taking place on the establishment of an eastern corridor to address freight and other logistics issues faced by the industry. There should also be a national body to supervise and undertake research in the steel sector, he said.
Mr Ajay Shriram. President, CII, and Chairman & Senior Managing Director, DCM Shriram Limited, pointed out that the demand for steel is bound to accelerate with India building much needed infrastructure. To develop a roadmap, he suggested creating a joint task force with industry and ministry as partners to bring in all diverse stakeholders together for an action agenda for the sector.
Steel Secretary, Mr Rakesh Singh said that the government's effort to increase the share of manufacturing in GDP from 16 per cent to 25 per cent put great responsibility on the steel sector. To encourage greenfield units, he said that discussions were on regarding SPVs in association with the state governments. These SPVs would ensure raw material linkages and clearances for the project, and then be auctioned or sold to the private sector through appropriate mechanisms.
Earlier, Mr C S Verma, Chairman, CII National Committee on Steel and Chairman, SAIL, set the tone for the discussions by outlining the various challenges hindering the steel industry from realizing its potential. He highlighted the unavailability of raw materials, high cost of logistics, human resource gaps and low R&D spend. He also pointed to the need to review FTAs especially for CEPA and dumping by China under the guise of alloy steel.
Welcoming the government's Make in India initiative, Mr Sajjan Jindal, Chairman & Managing Director, JSW Steel Limited, spoke of the need for closer coordination between various stakeholders so that the Indian steel industry could realize its potential. Since steel is a base industry, the effort must be taken as a mission by all, he said.
In addition to the various challenges outlined by previous speakers, Mr Naveen Jindal, Chairman, Jindal Steel & Power Limited, said that steel was still very expensive for the common man and as a result, per capita consumption has been almost stagnant. For costs to fall, output must increase. To increase output and meet the goal of 300 MTPA by 2025, government support and favourable policies were essential.
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Mr Firdose Vandrevala, Executive Vice Chairman, Essar Steel, pointed out the need for Indian steel to be at the lower end of the cost curve else it will not inspire confidence in the investor. For that, the three profit pools relating to steel, coking coal and iron ore must be integrated. He also questioned why steel was not being given infrastructure status while power and hotel enjoyed the privilege.
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