Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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India’s growth journey is interwoven with the country leveraging the potential of the mining and manufacturing industry to its magnificent fullest. Given that both the manufacturing and mining sector have a huge role to play in nation-building by generating livelihoods for the masses and powering sectors of strategic importance, it is imperative to leverage rich natural deposits sustainably to power the manufacturing sector. The Mining Sector is the third-largest employment provider in India. The Mineral mining sector directly & indirectly employs about 11 million people and supports the livelihoods of about 55 million people This number can further multiply if the sector is well explored and supported by government policies & reforms.

The iron & steel sector is the key pillar of the new India in the making. Our country needs high-quality indigenously produced steel to power strategic sectors like defence, space, automobiles, etc. for long-term sustainable growth. The Iron Ore mining and the entire steel industry supply chain, which provides the key raw materials for manufacturing steel, therefore needs to be nurtured, supported, and protected with economically, socially, and environmentally sound policies so that they can provide India with an unbeatable economic advantage. Iron Ore & Steel have played an important role in the development of the Indian economy. India’s crude Iron Ore & Steel consumption increased over five times from 1990 to 2021. However, India’s mineral mining sector is still to cover lot of ground to reach its full potential whereas mining in India is being carried out in the 0.25 % area compared to 17 % of the country’s land which has mineral reserves. India contributes only ~2% of the global exploration expenses whereas other major countries share is ~ 12-14%. The industry has massive scope for growth in comparison to other developed countries across the world. Per capita steel consumption in India is around 75 kg against the world average of around 228 kg., while in China, it is around 691 kg. similarly in stainless steel, India’s per capita consumption is 2.5 kg against the world average of around 6-7 Kg and China’s 16-17Kg.

The government of India has set for itself an ambitious target of becoming a $5 trillion economy by 2024-25. And this is achievable only if the country is successful in leveraging the potential of its vast mineral resources in the most optimal and sustainable manner. The iron & steel sector is extremely vital in the country’s economic progression because it has one of the highest economic linkages in overall GDP with the present contribution of around 2 % to India’s GDP. The Mines and Minerals (Development and Regulation) Amendment Act, 2021 is an important first step towards realizing the full potential of the mining sector but there is much more that can be and should be done. There is a dire need to bring new Iron Ore Mines into production with a high focus on exploration and emphasise should be on the beneficiation of low-grade ore for Mineral sustainability.

The sector is taking a massive hit because of high tax rates in India due to instances of duplication of taxes including Royalty over Royalty, Overlapping State-Specific Taxes like in GPF in Goa & SPV in Karnataka, Coal Compensation Cess etc. which makes it difficult for India to compete with global peers. For India which is on the path of exponential growth, it is pertinent to unlock the potential of the country’s Iron & Steel sector through policy reforms which can further enhance ‘ease of doing Business’ with utmost focus on sustainability. This will pave the way for the country to become an attractive destination for global supply chain owners, who would like to find the right balance between economic prospects and social consciousness and make India a preferred global sourcing hub for Steel and value-added products. A well-mapped positive trajectory like this will help India achieve its double-digit growth dream supported by the catalyzing power of the steel industry.

Vedanta Iron and Steel Sector in line with its commitment toward sustainable and holistic development of all is strengthening the capabilities of the country’s manufacturing and infrastructure sector. It has embarked on a journey to become the highest value creator in the Iron and Steel Sector. The Company is producing all the materials that are required for the manufacturing steel or stainless steel making viz. iron ore, steel, metallurgical coke, Ferrochrome, Pig Iron, Cement, DI pipe and soon is going to produce nickel which will be a key driver for country’s EV transition. The Company envisions to reach to carbon-neutral operations by 2050 with cutting-edge technology with a high emphasise on renewable energy, automation, and digitalization.

 

Authored by

Sauvick Mazumdar, CEO- Iron & Steel Sector, Vedanta Limited.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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