India is the world's fourth largest producer of crude steel (up from eighth in 2003); the country is expected to become the second largest producer by 2015. Total steel production grew at a compound annual growth rate (CAGR) of 6.6 per cent over FY08-11 to 69.6 million tonnes (MT); production in the first nine months of FY12 is more than three-fourth of FY11 levels and is estimated to touch 128.1 MT by FY17.
Finished steel production stood at 66.0 MT in FY11, recording a CAGR of 4.2 per cent over the above-mentioned period; analysts expect production figures to shoot up in the next five years with the Ministry of Steel forecasting production levels at 115.3 MT by FY17.
301 MoUs have been signed with various states for planned capacity of about 488.6 MT.
Construction and infrastructure' is the largest consumer of steel in India, accounting for 61 per cent of total consumption in 2010. Total consumption of steel exceeded production and grew to 65.6 MT in FY12 as against 46.8 MT in FY07; this marked a CAGR of 7.0 per cent over that period.
In view of the changed dynamics of the sector both globally as well as domestically, Ministry of Steel has initiated the process of drafting the new National Steel Policy in place of the existing National Steel Policy in 2005. The government has set up a committee headed by the Steel Secretary for monitoring the progress on formulation of the new National Steel Policy. Four task forces have been constituted to study, analyse, consult and formulate draft policy documents on different aspects of the policy.
100 per cent foreign direct investment (FDI) through the automatic route is allowed in the sector. Moreover, there is no license requirement for capacity creation. Large infrastructure projects in public-private Partnership (PPP) mode are being formed.
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