India emerges 2nd largest steel scrap importer; industry seeks recycling boost

India, which overtook South Korea to become the world's second largest steel scrap importer in the first half of 2019, is looking to boost recycling. And, the same is set to feature on the agenda when leading entrepreneurs meet Finance Minister Nirmala Sitharaman on August 7.

The entrepreneurs, including JSW Steel Chairman and CEO Sajjan Jindal, are expected to call for a swift implementation of the draft policies announced by Steel, and Road Transport and Highway Ministries to encourage recycling of scrap.

Industry captains hope this will bring down steel scrap imports,which jumped 35 percent in the first six months of the year. In comparison, the domestic steel industry is growing at less than six percent.

Steel scrap is used as a raw material in the electric arc furnace route of steel making. About one-third of steel produced in India uses this route.

India imported 3.87 million tonne of steel scrap,with imports from United Arab Emirates (UAE) and the UK growing by 27 percent and 117 percent, respectively. In comparison, India was the third largest importer in 2018, behind Turkey and South Korea.

"This is a clear indication that our system is not geared up for consuming our internal scrap," Jindal said in a series of tweets. "A firm policy on scrapping of old vehicles is the need of the hour...millions of jobs will be created if we bring in some regulations for scrapping old vehicles," he added.

The government will earn revenue from higher auto sales + jobs + push to the economy in these days of slowdown. It’s time our nation thinks along these lines. We cannot take our environment for granted and it’s time for a #policyreform. @nsitharaman @FinMinIndia #ScrapAndPropel pic.twitter.com/XGkb1jHWXK

— Sajjan Jindal (@sajjanjindal) August 7, 2019

That will be needed as India will have 22 million obsolete vehicles by 2025 from 8.7 million at present. As of now, recycling is mostly done by the unorganised segment. While some of the bigger companies, including Tata Steel, have now taken initiatives to tap into the opportunity, industry players are looking for a policy push.

The draft policies from both ministries were open for public comments and the hope is that these will be implemented later this year.

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