Indian Ministry Takes Major Initiatives to Promote Domestic Use and Production of Steel

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Researched by Industrial Info Resources India (Delhi, India)--India is currently the world's fifth-largest producer of steel, and it is expected to become the second-largest producer by 2016. The country already is the leader in the production of direct-reduced iron, or sponge iron. To expand the capacity for steel production in India, 222 memoranda of understanding have been signed in various states, for a planned capacity of about 276 million tons.

The government of India is taking major initiatives to encourage investment prospects in various states. The "National Steel Policy 2005" is under review, and the process of drafting a plan titled the "National Steel Vision" has been initiated. The government also has prepared a policy paper on research and development that focuses on coal ash reduction and the production of high-grade value steel in the country. The per capita consumption of steel in India is only about 49 kilograms, whereas the world average is 182 kilograms. A joint plant committee has submitted its report to determine the factors that can increase the per capita consumption of steel.

The public-sector companies also have undertaken major expansion plans. NMDC Limited (Hyderabad) is setting up a 3 million-ton-per-year integrated steel plant at Nagarnar, in Chhattisgarh, construction of which has begun. In order to ensure the availability of commonly used items of steel in rural areas across the country, the government has decided to appoint at least one dealer in each district. The government also acknowledges that the conservation of iron ore reserves in the country is of paramount importance. An export duty of 20% has been imposed to encourage more consumption in the domestic market. The government also has formed a special purpose vehicle, named International Coal Ventures Limited, for the acquisition of metallurgical and thermal coal assets outside the country.

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