The Indian government is calling its energy producers to increase their consumption of domestically-manufactured steel in future infrastructure projects to cut the dependence on imports, support the economy, and raise employments.
India is the second-biggest producer of the metal globally but relies on costly overseas purchases for some high-end products.
On Tuesday, Federal Minister for Steel and Oil Dharmendra Pradhan pushed officials from the oil and gas sectors to prepare a roadmap to boost their share of domestic steel consumption.
“Domestic players should increase on the occasion so that cost does not escalate in our efforts to promote localization of the supply chain,” Pradhan underlined.
India’s companies are planning to invest around USD160 billion by 2025-2026 to expand refining capacity, building gas infrastructure, and spur on exploration and production. State-run Engineers India Ltd predicted India’s oil and gas sector will consume 50 million tonnes of steel in the upcoming 15 years.
The country’s top crude refiner Indian Oil Corp. (IOC) plans to obtain 400,000 tonnes of local steel and 5,500 tonnes of plates worth a total of INR161.5 billion (USD2.1 billion) in the coming three years in its expansions of refining capacity and construction of gas infrastructure.
However, chairman Sanjiv Singh said that the company still needs to imports some grades of steel rarely being produced domestically due to high cost.
Reacting to this, Steel Authority of India Chairman Anil Kumar Chaudhary said while the cost of producing specialized grades was higher, economies of scale meant that a rise in orders would bring it down.
