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India May Make Local Steel Mandatory In Government Infrastructure Projects

The Union Cabinet may clear a proposal on Wednesday to make usage of local steel mandatory for government’s infrastructure projects

Photo Credit : Shutterstock


The Union Cabinet may clear a proposal on Wednesday (May 03) to make usage of local steel mandatory for government’s infrastructure projects, an official with direct knowledge of the matter said, aimed at boosting sales of local companies and global steel makers’ investments.

The ministry’s flagship National Steel Policy, which seeks to outline a roadmap to increase the country’s annual steel production to 300 million tonne by 2025, is also expected to be passed in the cabinet, the official told Reuters.

The policy is broadly seen as a continuation of India’s protectionist stance against countries such as China and Russia.

A steel ministry spokesman was not immediately available to respond to telephone calls from Reuters seeking comment.

It also comes in the backdrop of a trade probe launched by US President Donald Trump against cheap imports into the United States, in a move that could aggravate trade friction among global producers.

India wants to nearly triple its production capacity by the next decade and acquire technology to produce higher value products including automotive steel.

The government policy will also provide a guiding light for Indian steel companies that are seeking to expand while saddled with huge debts.

In March, Reuters had reported the steel ministry was considering a move making it mandatory to use local steel — pitching it as a WTO-compliant move.

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.

Between April and March, India’s steel imports fell 37 per cent year-on-year, data from a government body showed, primarily due to measures announced by the government.

The proposed National Steel Policy, which was floated in October by Niti Aayog, an influential government think-tank that replaced the Planning Commission, recommended measures to also reduce dependence on imported coking coal, lack of which recently crippled production after heavy rains in Australia created shortages.