38 MoUs Inked To Save Rs 40000 Cr Capital Goods Import

Bhubaneswar: Leading Capital Goods (CG) producers from the across the globe inked 38 Memorandums of Understanding (MoUs) with leading Indian steel companies, envisaging reduction in imports of CGs meant for the steel sector worth Rs 39,400 crore by promoting manufacturing of capital goods in the country.

The MoUs were signed at a conclave in Bhubaneswar, which was organized by Ministry of Steel in association with Confederation of Indian Industry (CII) and MECON. The National Steel Policy-2017 envisages creation of 300 million tonnes (MT) of steel capacity in the country by 2030-31 as against existing 130 MT.

The estimated import of plant and equipment, for reaching 300 MT capacity, will be around USD 25 billion. For meeting the spares requirement estimated at 300 MT capacity level, India will have to spend about USD 500 million annually for import of proprietary and other spares.

In his keynote address Odisha Chief Minister Naveen Patnaik said, “The MoUs inked today for the CG sector has the potential of transforming India into a world-class manufacturing hub. Odisha has a rich mineral base and produces 14 per cent of the country’s total mineral production in the country. Odisha is focusing on attracting major investments in the metal sector. The state has ample potential to become a major steel hub.”

In his welcome address, Union Steel Minister Chaudhary Birender Singh said, “In order to ensure that the MoUs, which are being signed today culminate into manufacturing of capital goods; a purchase preference policy to cover all purchases of steel products, including capital goods is being worked upon by the Steel Ministry. It will ensure that products/product categories which do not get covered by the domestically-manufactured iron and steel policy will get covered by the proposed policy on the lines which has been prescribed by the DIPP. These MoUs are a win-win for both. The foreign manufacturers who will enter into a JV with an Indian firm can get advantage of purchase preference. Indian manufacturers will benefit from the foreign investments and technology and also get to fulfil the eligibility condition of experience.”

He further said that massive investment of over 800 billion US dollars had already been committed for the development of world-class infrastructure for roads and highways, bridges, airports, ports and inland river transport, railways and dedicated freight corridor. “These proposed infrastructure investments will be steel intensive and thereby spurring the demand of steel. As I visualise, India will be one of the main drivers of global steel demand on the back of strong domestic consumption”, Singh said.

Th Union Minister said that the Centre was promoting big, medium and small producers of steel together for uniform growth and momentum. “We recently instituted awards for India’s best steel producers in MSME sector, which were presented few weeks ago. Our focus on quality certification which is covering 86 percent of steel products in India now means that Indian steel is more competitive and standardized.  Steel industry being capital intensive, the sector had been adversely impacted by cyclical changes in steel industry. But our government has converted that challenge into an opportunity and a new law is resulting in better consolidation and entry of international steel companies to India,” he added.

Speaking on the occasion, Union Minister for Heavy Industries and Public Enterprises Anant G Geete said the Indian manufacturing companies have the capability to manufacture all non-proprietary items and the government is committed to facilitate technological tie-ups between domestic CG producers and their foreign counterparts for capacity building. He recalled that his ministry had helped in building a machine tools hub in Karnataka and suggested that his ministry proposes to do the same in Odisha and sought the state government’s cooperation in this regard.

Minister for Petroleum and Natural Gas, Skill Development and Entrepreneurship, Dharmendra Pradhan said that Odisha had mega steel projects, besides small and medium steel mills which also contribute significantly to the state’s overall steel production. “The government believes that Odisha has the potential to produce nearly 100 million tonne of the total 300 MT output targeted by 2030-31 as the state is home to sizeable mineral resource base,” he said.

He welcomed the proposal by Geete to set up a machine tools park in Odisha.