The followings policy initiatives have been taken by the Government after the liberalization to enhance the availability of steel in the country
- Removing the steel sector from the list of industries reserved for public sector and opened for private sector also.
- Exempting it from compulsory licensing.
- Imports of foreign technology as well as foreign direct investment are now freely permitted up to certain limits under an automatic route.
- As a facilitator, the Government provides fiscal and other policy measures for the growth of steel sector. Currently, GST rate on steel products is 18% and there is no export duty on steel products except on Ferrous waste and scrap. The government has also imposed export duty of 30% on Iron ore (both lumps and fines) with Fe content 58% and above. Export duty is however nil on iron ore fines and lumps with Fe content below 58%. Further iron ore pellets have nil export duty.
Other Government Initiatives:
- For ensuring raw material availability, the Government had issued Mines and Minerals (Development and Regulation) Amendment Act, 2015 & rules there-under which provides for allocation of iron ore to ‘specified end use’ to bring transparency in allocation of raw materials. This would also allow transfer of captive mining leases, granted otherwise than through auction, during mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies' dependent on supply of mineral ore from captive leases. The transfer provisions will also facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
- A Project Monitoring Group (PMG) has been constituted under the Cabinet Secretariat to fast track various clearances/resolution of issues related to investments of Rs 500 crore (US$ 76 million) or more.
- For reducing the stress in the steel sector, RBI has extended 5:25 scheme in July 2015, whereby longer amortization period for loans to projects in infrastructure and core industries sectors, say 25 years, based on the economic life or concession period of the project, with periodic re-financing, say every 5 years, is allowed.
- For ensuring quality of steel, 145 Indian Standards for steel have been brought under quality control orders issued by the Government. This will help in keeping away the production of inferior quality of steel in the country.
- Ministry of Steel has constituted an Investment Facilitation Cell to provide necessary information pertaining to steel sector, such as, policies of the Ministries, various incentive schemes and opportunities available to make it convenient for investors to take investment decisions.
Production Linked Incentive (PLI) Scheme : Government has approved inclusion of ‘Specialty Steel’ under the Production Linked Incentive (PLI) Scheme with a 5-year financial outlay of ₹ 6322 Crore to promote the manufacturing of ' Specialty Steel' within the country by attracting capital investment, generate employment and promote technology up-gradation in the steel sector. The Scheme was notified on 29.07.2021 and detailed scheme guidelines have been
published on 20.10.2021 for operationalization of the Scheme.
Launch of Steel Import Monitoring System (SIMS) : To facilitate domestic steel industry, Steel Import Monitoring Syste
(SIMS) had been put in place which requires the importer to submit advance information regarding intended imports to ensure granular data like
end-use, grade & other technical specifications etc. of steel items being imported under Chapter 72,73, and 86 of ITC (HS). SIMS was notified
by DGFT on 5th September 2019 and is operational w.e.f. 1st November 2019.