Last Updated on : 12 August, 2009

THE POLICY FRAMEWORK

Important Policy Measures 

1. In the new Industrial Policy announced in July, 1991 Iron and Steel industry, among others, was removed from the list of industries reserved for the public sector and also exempted from the provisions of compulsory licensing under the Industries (Development and Regulation) Act, 1951.
2. With effect from 24.5.92, Iron and Steel industry has been included in the list of `high priority' industries for automatic approval for foreign equity investment upto 51%. This limit has been recently increased to 100%.
3. Price and distribution of steel were deregulated from January 1992. At the same time, it was ensured that priority continued to be accorded for meeting the requirements of small scale industries, exporters of engineering goods and North Eastern Region of the country, besides strategic sectors such as Defence and Railways.
4. The trade policy has been liberalised and import and export of iron and steel is freely allowed. There are no quantitative restrictions on import of iron and steel items, covered under Chapter No. 72 of the ITC(HS) Code. The only mechanism regulating the imports is the tariff mechanism. Tariffs on various items of iron and steel have drastically come down since 1991-92 levels and the government is committed to bring them down to the international levels. In Chapter 72 there are two items viz. 72042110 and 72042910, which fall in the restricted list of imports.
5. Iron & Steel are freely importable as per the Extant Policy.
6. Iron & Steel are freely exportable.
7. Advance Licensing Scheme allows duty free import of raw materials for exports.
8. The floor price for seconds and defectives continues till date.
9. Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai, Calcutta and Chennai.
10. Mandatory pre inspection certificate by a reputed international agency for every import consignment of seconds and defectives.
11. In the union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20% to 10%

Manganese Ore

Policy for export of Manganese Ore(Extract from Exim Policy of DGFT) is as under :

(Source : Foreign Trade Policy, DGFT)

EXPORT POLICY FOR IRON ORE

The present EXIM policy permits export of iron ore from Goa and Redi sector to all destinations by the iron ore producers; irrespective of the iron content.

KIOCL is the canalizing agency for its own products (iron ore concentrates and iron ore pellets) since it is a 100% E.O.U. (export oriented unit).

The export of iron ore with Fe content above 64% is canalized through MMTC.

Export of Iron of Goa origin to China, Europe, Japan, South Korea and Taiwan (irrespective of Fe content) and Export of ore from Redi region to all markets (irrespective of Fe content) is not canalized.

However, some types of high-grade iron ore (Fe content above 64%) from specific areas like Bailadila in Chattisgarh are allowed to be exported with restrictions on quantity imposed primarily, with a view to meet domestic demand on priority.

Present quantitative ceiling of iron ore fixed by the Govt. are as under :-

(Source : Foreign Trade Policy, DGFT)

Chromite Ore

Policy for export of Chrome Ore(Extract from Exim Policy of DGFT) is as under :

(Source : Foreign Trade Policy, DGFT)

Assistance being provided by Ministry of Steel to Private Sector

Ministry of Steel is extending all possible support, as detailed below, for the development of Iron and Steel Sector in the country :

a) The Ministry is providing linkage for raw materials, rail movement clearance etc. for new plants and expansion of existing ones, wherever applied for. There are two linkage committees, viz.,

- Linkage Committee for finalising and reviewing the linkage of coal as well as iron ore supply to the Sponge Iron Plants set up/being set up in the country; and

- Linkage Committee for finalising and reviewing the linkage of coal as well as Iron Ore supply to the Pig Iron plants, new steel plants and coke oven setup/being set up in the country.

b) For movement of raw materials other than coal, a quarterly meeting of Central board of Transport (CBT) is held under the Chairmanship of Development Commissioner for Iron and Steel wherein the major producers and consumers of Iron and Steel units and representatives of railways are co-opted. The primary function of this committee is to finalise the wagon requirements and ensure an un-interrupted supply of raw materials to the producers. With closure of the office of DCI&S this task is being co-ordinated by a Jt. Secretary in the Ministry of Steel who has been disignated as the DCI&S.

c) The Ministry has been interacting with All India Financial institutions to expedite clearance of projects. The ministry has also been making presentations to the financial institutions and banks highlighting the emerging scenario in steel sector, technological issues need for development of the steel industry in India etc.

d) In order to review the progress of implementation of new steel projects and assess the problems faced by new units, regular interactions with Entrepreneurs proposing to setup Iron and Steel Plants are held at the level of Secretary.

e) Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector, and takes up these issues with the concerned ministries.

f) The Ministry has encouraged the setting up of "Institute for Steel Development and Growth(INSDAG)" in Calcutta in August, 1996. The leading steel producers in the country are members of this Institute, which has been set up with the objective of promoting, developing and propagating the proper and effective use of steel and increasing intensity of steel usage particularly in the construction sector and in rural and semi urban areas.

g) In order to resolve the problems faced by existing & new steel plants & to assist major steel plants being implemented, Govt. has setup a Project Coordination Group under the Chairmanship of Steel Minister .