As many as 38 pacts worth of $ five billion were signed on Tuesday, which will give impetus to the manufacturing of capital goods for the iron and steel industry.
The pacts were signed between 20 technology providers, capital goods manufacturers and steel producers for manufacturing of capital goods in India. Out of the 20 companies who exchanged the MoUs, about 12 are foreign players.
The MoUs were signed at a conclave on Capital Goods for Steel Sector: Manufacture in India, organized by Confederation of Indian Industry (CII) jointly with Mecon and Steel Ministry.
Some of the companies who signed the pacts were China-based ACRE, Italy based CSM, Luxemburg headquartered Paul Wurth, Danieli Corus- supplier of tailor-made solutions for the primary metals industry and domestic steel makers and heavy equipment manufacturers including SAIL, JSW, Bharat Heavy Electricals Limited, MECON Limited, Heavy Engineering Corporation Limited, among others.
The technological areas in which the pacts were signed were for coke oven, agglomeration, coal washery, blast furnaces, steel making, rolling mills, waste to energy and iron ore crusher and beneficiation.
India has set a target to increase its crude steel capacity to 300 million tonnes by 2030-31 from about 134 million tonnes presently.
For adding the new capacity, Indian steel industry is expected to invest $ 128 billion in next 10 to 12 years. For this, India will have to import large number of critical plants and equipment valuing almost $ 25 billion to meet the needs of domestic steel industry by 2031.
Besides, spares worth over $ 500 million will have to be imported to meet the needs of steel industry by 2030-31.
“In order to ensure that MoUs which are signed today culminate into manufacturing of capital goods, a purchase preference policy to cover all purchase of steel products is being worked upon by the ministry. It will ensure that products and product categories which are not covered by the DMI&SP (Domestically Manufactured Iron & Steel Products) policy will get covered by the proposed policy on the line of which has been prescribed by the DIPP “, said Union steel minister Chaudhary Birender Singh at the conclave.
The minister pointed out that the trends in the last four years show that Indian steel consumption has been growing by seven per cent and steel production was up by 6.7 per cent, which is the highest growth in the world.
As of today, India has about 134 million tonnes steel production.
“Our initiative to domestically meet the demand of capital goods for steel sector is a well thought out strategy to develop India into a global manufacturing hub for steel plant equipment and machinery. The proposed setting up of the facilities will not only reduce imports but will have force multiplier impact in long term sustainability of steel industry in India, he added.
Singh said that Global Forum for Steel Excess Capacity of which India had been a Co-chair country has acknowledged that India has a lot of potential for increase in steel demand and production due to the current level of low per capita consumption.
Indian per capita consumption has gone up to 68 kg from 58 kg in last four years.
Speaking on the occasion Union minister for Heavy Industries and Public Sector Enterprises Anant Gangaram Geete sought the Odisha government’s support for setting up a machine tools park in the state in line with the one in Karnataka.
The centre has requested the state to allocate about 500 acres of land to set up the park.