{"id":87818,"date":"2026-11-02T18:44:10","date_gmt":"2026-11-02T13:14:10","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=87818"},"modified":"2026-11-02T18:44:13","modified_gmt":"2026-11-02T13:14:13","slug":"national-steel-policy-2047","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/02-11-2026\/national-steel-policy-2047","title":{"rendered":"Draft Steel Policy For 2047: Balancing Protection with Global Competitiveness"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recently, the <strong>Union Ministry of Steel<\/strong> has released the <strong>Draft National Steel Policy: Vision 2047<\/strong>, aiming to transform India into a globally competitive steel producer and increase steel exports to 45 million tonnes.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About India&#8217;s Steel Industry and Its Performance<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India&#8217;s steel industry is a critical pillar of economic development, supporting infrastructure, construction, automobiles, railways, defence and manufacturing.<\/li>\n\n\n\n<li><strong>Key Achievements:<\/strong>\n<ul class=\"wp-block-list\">\n<li>India has emerged as the <strong>world&#8217;s second-largest <\/strong>crude steel producer, with production reaching approximately 170 million tonnes (Mt).<\/li>\n\n\n\n<li>Its global position has<strong> improved from ninth in 2000<\/strong>, when it accounted for less than 5% of global steel production.<\/li>\n\n\n\n<li>The industry&#8217;s <strong>average profitability<\/strong> stood at approximately 15% during 2000\u20132025, exceeding the broader manufacturing sector by 3\u20134 percentage points.<\/li>\n\n\n\n<li>The \u2018<strong>Draft National Steel Policy: Vision 2047\u2019<\/strong> seeks to strengthen India&#8217;s global position, promote exports and develop a competitive domestic steel ecosystem.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>However, higher production and profitability do not necessarily indicate global competitiveness.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Understanding the Protection\u2013Competitiveness Paradox<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India&#8217;s steel industry enjoys considerable government protection, which raises concerns about whether its profitability reflects operational efficiency or policy support.<\/li>\n\n\n\n<li><strong>Major Forms of Protection Include:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Iron Ore Export Duty:<\/strong> A 30% export duty on iron ore containing more than 58% iron content keeps domestic iron ore prices approximately 30\u201340% below international levels.<\/li>\n\n\n\n<li><strong>Import Tariff Protection:<\/strong> A 7.5% basic import tariff, combined with an 11.5% safeguard duty, creates an effective protection level of around 18%, compared with approximately 3\u20134% in ASEAN countries.<\/li>\n\n\n\n<li><strong>Non-tariff Barriers:<\/strong> Quality Control Orders (QCOs) cover 228 steel products. Although the Gauba Committee reportedly recommended removing 122 products, only 59 had been suspended at the time of the reported assessment.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Consequently, domestic steel producers can sell hot-rolled coils at a 6\u20137% premium over Japanese prices, despite Japan being a relatively high-cost producer.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Economic Consequences of Excessive Protection<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Excessive protection creates several economic distortions:\n<ul class=\"wp-block-list\">\n<li><strong>Higher Input Costs:<\/strong> Expensive domestic steel adversely affects construction, automobiles and engineering industries.<\/li>\n\n\n\n<li><strong>Export Competitiveness:<\/strong> MSMEs and downstream manufacturers face higher production costs, reducing their ability to compete internationally.<\/li>\n\n\n\n<li><strong>Resource Misallocation:<\/strong> Lower domestic iron ore prices reduce mining incentives and limit value creation in mineral-rich regions.<\/li>\n\n\n\n<li><strong>Reduced Efficiency:<\/strong> Protection from international competition weakens incentives to adopt advanced technologies and improve productivity.<\/li>\n\n\n\n<li><strong>Fiscal &amp; Economic Distortions:<\/strong> Policy-induced profitability may conceal inefficient operations and discourage necessary structural reforms. Reducing steel prices by 6% could reduce profitability by 25\u201350% for major steel companies.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Other Concerns in India&#8217;s Steel Industry<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Apart from excessive protection, the industry faces several structural challenges:\n<ul class=\"wp-block-list\">\n<li><strong>Dependence on Imported Coking Coal:<\/strong> India relies heavily on imports, exposing producers to international price fluctuations.<\/li>\n\n\n\n<li><strong>Environmental Concerns:<\/strong> Conventional blast furnace-based steelmaking is energy-intensive and carbon-emission-intensive.<\/li>\n\n\n\n<li><strong>Technological Limitations:<\/strong> Greater investment is required in advanced steelmaking, automation and high-value speciality steel.<\/li>\n\n\n\n<li><strong>Mining Inefficiencies:<\/strong> Only around 10% of India&#8217;s obvious geological potential has reportedly been explored.<\/li>\n\n\n\n<li><strong>Public Sector Inefficiencies:<\/strong> Differences in profitability and market performance indicate the need to improve governance and operational efficiency.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Related Reforms &amp; Initiatives<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>National Steel Policy, 2017:<\/strong> Promote domestic steel production and reduce import dependence.<\/li>\n\n\n\n<li><strong>PLI Scheme For Specialty Steel:<\/strong> Encourage domestic manufacturing of high-grade and value-added steel.<\/li>\n\n\n\n<li><strong>National Green Hydrogen Mission: <\/strong>Facilitate the adoption of green hydrogen in hard-to-abate industries, including steel.<\/li>\n\n\n\n<li><strong>Steel Scrap Recycling Policy, 2019:<\/strong> Promote scrap availability and resource efficiency.<\/li>\n\n\n\n<li><strong>PM Gati Shakti:<\/strong> Improve multimodal connectivity and reduce logistics costs.<\/li>\n\n\n\n<li><strong>National Mineral Policy, 2019:<\/strong> Encourage sustainable mineral development and exploration.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reforms Required For Global Competitiveness<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Gradual Reduction in Tariff Protection: <\/strong>Import duties should be rationalised over five years to bring them closer to ASEAN levels.\n<ul class=\"wp-block-list\">\n<li>Unnecessary QCOs should also be removed to encourage competition and improve input availability.<\/li>\n\n\n\n<li>The experience of pharmaceuticals and automobile components demonstrates that reduced protection need not undermine domestic industries.\u00a0<\/li>\n\n\n\n<li>India&#8217;s global export share in automobile components increased from 0.2% in 2003 to 1.5% in 2024, while pharmaceuticals increased from 0.7% to 2%.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Rationalise Iron Ore Export Duties: <\/strong>Removing the 30% export duty on high-grade iron ore would allow market-based pricing, encourage exploration and improve returns from mineral resources.<\/li>\n\n\n\n<li><strong>Reform Mining Regulations: <\/strong>India should adopt exploration-friendly mining policies inspired by countries such as Australia.\n<ul class=\"wp-block-list\">\n<li>Discoverers of mineral deposits should receive appropriate incentives and transparent mechanisms for accessing mining rights.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Improve Public-sector Efficiency: <\/strong>Privatisation or strategic disinvestment of selected inefficient steel plants should be considered, alongside professional management and stronger corporate governance.\n<ul class=\"wp-block-list\">\n<li>SAIL&#8217;s market share reportedly declined from 30% to 10% between 2000 and 2025, while JSW&#8217;s increased from 1% to 12%.<\/li>\n\n\n\n<li>It highlights the importance of operational efficiency and competitive business models.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Promote Green &amp; High Value Steel: <\/strong>Investment in hydrogen-based steelmaking, renewable energy, scrap recycling, energy efficiency and speciality steel is essential to remain competitive in emerging global markets.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward: Towards Steel Competitiveness by 2047<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India needs to move from protection-led industrial growth towards productivity-led competitiveness.<\/li>\n\n\n\n<li>The National Steel Policy should establish measurable benchmarks covering:\n<ul class=\"wp-block-list\">\n<li>Internationally competitive production costs and productivity.<\/li>\n\n\n\n<li>Higher exports and greater integration into global value chains.<\/li>\n\n\n\n<li>Increased investment in research, development and technological innovation.<\/li>\n\n\n\n<li>Sustainable mining and responsible resource utilisation.<\/li>\n\n\n\n<li>Lower carbon intensity and wider adoption of green steel.<\/li>\n\n\n\n<li>Greater participation of MSMEs in the steel value chain.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Reforms should be phased in to provide domestic manufacturers sufficient time to adjust without causing unnecessary industrial disruption.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background has-fixed-layout\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q] <\/strong>India&#8217;s steel industry has achieved significant growth in production and profitability. However, excessive protection may undermine its long-term global competitiveness. Examine, and suggest suitable reforms to make the Indian steel industry globally competitive.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/indianexpress.com\/article\/opinion\/columns\/india-steel-policy-2047-global-competitiveness-tariffs-10946438\/\" target=\"_blank\" rel=\"noopener\">Source: IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Published on:<\/strong> 02 November, 2026<\/p>\n<p> Recently, the Union Ministry of Steel has released the Draft National Steel Policy: Vision 2047, aiming to transform India into a globally competitive steel producer and increase steel exports to 45 million tonnes. <\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-87818","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/87818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=87818"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/87818\/revisions"}],"predecessor-version":[{"id":87819,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/87818\/revisions\/87819"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=87818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=87818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=87818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}