Local sourcing norms to boost Indian steel industry
03 May 2017
The government is in the process of introducing a new policy to make local sourcing of steel mandatory in the implementation of state infrastructure projects.
The union cabinet is expected to approve a proposal to this effect today, reports quoting officials close to the development said.
The cabinet's decision comes in the backdrop of protectionist tendencies in free-trade haven of America under the new administration under President Donald Trump.
US authorities have also launched a trade probe against cheap imports into the United States, in a move that could aggravate trade friction among global steel producers.
India's move is aimed at boosting sales of local companies by restricting imports from countries such as China and Russia and to promote investments by global steel makers.
The National Steel Policy that seeks to increase the country's annual steel production to 300 million tonnes by 2025, is also expected to be passed in the cabinet.
India plans to nearly triple its production capacity by the next decade and acquire technology to produce higher value products including automotive steel.
A boost to production and sales is needed both for the steel industry and state-owned lenders who have thousands of crores of rupees locked up in bad loans with core industries such a steel and electricity.
The government policy of local sourcing of steel would also provide the necessary impetus to debt-laden Indian steel companies to expand production.
India is also expected to soon announce long-term duties on some steel products imported from China, Japan and Russia, despite complaints from some of the targeted countries.
In fact, an impost of import duties on select steel products has helped India to reduce steel imports by as much as 37 per cent in April-Mach 2016-17, official figures released by the government showed.
The Indian government says such policies that looks to safeguard local industries are WTO-compliant, while aggrieved exporting nations plan to challenge it in the WTO.