Goyal Urges Steel Makers to Aim Higher, Calls 500 MT Target 'Sub-Optimal'

Mumbai, Apr 25 (PTI) Union Minister Piyush Goyal on Friday said the target of achieving 500 million tonnes (MT) of steel production is a "sub-optimal" one and the industry should aim for a higher target amid increasing per capita consumption of the metal in the country.

The minister was delivering his keynote address at the 6th edition of Steel India 2025 event, hosted jointly by the Ministry of Steel and the Federation of Indian Chambers of Commerce and Industry (Ficci), which started on Thursday.

"Clearly 500 million tonnes (of steel production) is a sub-optimal target. We should, I think aspire at least to go up to the level of our nearest competitor. And why can we not aspire to be the world's largest manufacturer of steel by 2047," Goyal exhorted the industry.

Referring to the steel industry as the "backbone" of the country's economy, the minister emphasised the crucial role of steel in the nation's journey toward becoming a developed and prosperous country.

Steel is an essential component in nearly every sector of life, be it shipping, shipbuilding, railways, defence, automobiles, infrastructure across the country, it is there in every walk of life," he said.

The minister also urged for continued growth and innovation, questioning if the country should be satisfied with its current status. He emphasized the need for collective action within the steel sector to further elevate India's position on the global stage.

Stressing the potential for expanding steel's use in new sectors, particularly in the construction of prefabricated buildings, he pointed out that many developed nations have adopted precast prefabricated building structures and suggested that India should consider introducing such practices, especially in urban areas.

While acknowledging that prefabricated buildings may initially be more expensive, Goyal proposed that the steel industry invest in research and development (R&D) to minimize the cost differences.

He also highlighted the importance of collaboration between the steel industry, the government, NITI Aayog, and international experts to create a compelling framework for the real estate sector to adopt prefabricated steel buildings.

By doing so, in his view, the industry could attract more interest and investment in such projects.

The minister further emphasized that economies of scale would play a crucial role in reducing costs, making steel more affordable and attractive for broader use.

The Union minister highlighted the government's focus on promoting the "Make in India" initiative, emphasizing that the push to boost manufacturing in India would create significant opportunities for the steel industry. As part of this drive, he pointed out that many government projects now mandate the use of Indian-made steel, further driving demand for high-quality domestic steel.

This initiative, he argued, would lead to increased construction of factories and other infrastructure, reinforcing the role of steel in India's economic growth.

Goyal also mentioned his efforts in negotiating free trade agreements (FTAs) with several countries and blocs, including the European Union, which comprises 27 nations. These agreements are crucial for expanding India's access to international markets, particularly for its cost-effective and high-quality steel products, he said.

Goyal also addressed the current global economic turmoil, stating that, despite the challenges, the world is increasingly looking to India as a beacon of growth. He noted that India contributes to nearly one-sixth of global growth and is recognized as the fastest-growing large economy in the world.

With projections indicating that India will become the third-largest economy globally by 2027, Goyal laid the importance of leveraging this growth to benefit the steel industry, which will be a key player in India's economic transformation.

Goyal asserted that India's rise to a top-five economy would occur much sooner than anticipated, with the country set to reach the third-largest economy by 2027, instead of 2044 as originally envisioned.

Goyal emphasized that this swift economic growth would heavily benefit the steel industry, positioning it as a crucial player in India's journey toward becoming a USD 30 to $35 trillion economy by 2047.

"The biggest beneficiary of this growth story to a 30 or 35 trillion dollar economy by 2047, will be the steel industry," he said. He pointed out that India's current per capita steel consumption of 100 kg is far too low, and the goal should be to increase it to 700 kg.

He emphasized that every aspect of the steel production chain - from raw materials to manufacturing - must prioritize both quality and environmental responsibility. At the same time, Goyal cautioned that while pursuing higher standards, the industry must ensure that it remains cost-competitive, with the highest efficiency and lowest costs.

He emphasized the importance of supporting local manufacturers, particularly for equipment that is not yet made in India.

Citing the pandemic as a "wake-up call," Goyal stressed the vulnerabilities that arise when a country depends too heavily on global supply chains and added that the supply chains can face sudden disruptions, such as shipping issues, freight cost surges, or crises like the oil shortage, which can jeopardize industries relying on imported goods.

Goyal made a direct appeal to the steel industry, asking them to prioritize Indian suppliers and reduce the tendency to import when local alternatives exist.