National Steel Policy and Steel Sector Reforms
India stands as the second-largest crude steel producer in the world, having surpassed Japan in 2019. The domestic steel sector contributes roughly 2% to the national Gross Domestic Product (GDP) and directly employs over 5 lakh individuals. Under the framework of the National Steel Policy (NSP) 2017, the Ministry of Steel laid down a strategic vision to transform India into a technologically advanced, self-reliant, and globally competitive steel producer. Policy interventions focus on expanding domestic manufacturing capacity, lowering import reliance on coking coal and value-added steels, and promoting low-carbon production processes.
Core Objectives of National Steel Policy 2017
NSP 2017 establishes long-term goals for scaling infrastructure and raw material security by 2030-31:
- Crude Steel Capacity: Expansion of national crude steel capacity to 300 Million Tonnes Per Annum (MTPA).
- Crude Steel Production: Scaling actual domestic crude steel production to 255 MTPA.
- Per Capita Consumption: Raising domestic per capita finished steel consumption to 160 kg by 2030-31.
- Raw Material Securitization: Reducing import dependency for coking coal from 85% to 65% through coking coal washeries and domestic block allocations.
- Value Addition: Meeting the entire domestic demand for high-grade automotive steel, electrical steel, and special alloys for strategic applications through local manufacturing.
Key Steel Sector Reforms and Schemes
Production Linked Incentive (PLI) Scheme for Specialty Steel
The government launched the PLI Scheme for Specialty Steel with an outlay of ₹6,322 crore to promote downstream high-value manufacturing. The scheme covers five distinct product categories: coated or plated steel products, high strength and wear-resistant steel, specialty rails, alloy steel products and steel wires, and electrical steel. Financial incentives range between 4% and 15% on incremental sales over five years to drive import substitution.
Domestically Manufactured Iron and Steel Products (DMI&SP) Policy
The DMI&SP Policy mandates preference for domestically produced iron and steel in government procurement projects. The policy enforces minimum local value addition criteria for steel products supplied to public sector undertakings and government agencies.
Steel Import Monitoring System (SIMS)
SIMS mandates advance online registration for steel imports entering the country. The system provides real-time analytical data on import patterns, enabling rapid policy responses against trade distortions.
Greening the Steel Sector and Sustainability Roadmap
India aims to decarbonize the industrial sector to align with its net-zero emissions target by 2070. The Ministry of Steel introduced specific measures to transition toward green steelmaking:
- Green Steel Taxonomy: A classification framework categorizing steel products according to carbon emissions per tonne of finished output.
- Green Hydrogen Integration: Deployment of green hydrogen in Direct Reduced Iron (DRI) plants to replace coal-based reducing agents.
- Scrap Recycling Policy: Promotion of organized vehicle scrappage facilities and scrap processing centers to increase raw material supply for Electric Arc Furnaces (EAF) and Induction Furnaces (IF).
Structural Profile of the Indian Steel Sector
| Metric / Parameter | Value / Target |
| Global Ranking | 2nd largest crude steel producer |
| National Capacity Target (2030-31) | 300 MTPA |
| Per Capita Consumption Target | 160 kg |
| Major Manufacturing Routes | Blast Furnace-Basic Oxygen Furnace (BF-BOF), Electric Arc Furnace (EAF), Induction Furnace (IF) |
| Contribution to National GDP | Approximately 2% |
Core Steel Sector Facts
- Economic Deregulation: Price and distribution controls on steel were removed in 1992, allowing market-determined pricing and 100% Foreign Direct Investment (FDI) via the automatic route.
- Constitutional Status: Central regulation of major industries falls under Entry 52 of the Union List (List I) in the Seventh Schedule of the Indian Constitution.
- Key Input Ratios: Producing one tonne of crude steel requires approximately 1.6 tonnes of iron ore, 0.8 tonnes of coking coal, and 0.3 tonnes of flux materials (limestone and dolomite).
- Leading Production States: Odisha, Chhattisgarh, Jharkhand, Karnataka, and Maharashtra lead raw iron ore extraction and crude steel manufacturing.
- Public Sector Units: Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) function as key Central Public Sector Enterprises under the Ministry of Steel.
- Shore-Based Plant: Rashtriya Ispat Nigam Limited (RINL) at Visakhapatnam, Andhra Pradesh, operates India’s first shore-based integrated steel plant.
- Scrap Ratio Goal: National policy aims to increase the share of scrap-based steelmaking from current levels to over 30% by 2030.
