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India to set up pilot project for specialised steel manufacturing

08 April, 2016

As part of its Make in India strategy, the National Democratic Alliance (NDA) government may shortly decide upon setting up the country’s pilot research and development project for specialised electrical steel used for manufacturing transformers.

After much delay, India’s ministry of steel may finally decide upon the production of cold-rolled grain oriented (CRGO) steel. Currently, India doesn’t have this capability and is dependent on imports, primarily from countries such as Japan.

According to two government officials, who requested anonymity, the ministry of steel held a meeting on 22 March to discuss the issue with other stakeholders in the Rs500-crore pilot project. The equal partners in the project include Tata Steel Ltd, state-owned Rashtriya Ispat Nigam Ltd (RINL), National Metallurgical Ltd (NML) and the ministry of steel. 

“A draft detailed project report (DPR) has been submitted by the consultant, Mecon Ltd, and the final approval rests with the steel ministry,” said one of the officials quoted above. 

A senior Mecon executive confirmed that a draft DPR has been submitted.

The demand for transformers in India will increase with the government’s plan to provide power to around 280 million people that don’t have access to electricity. The government, under the Deen Dayal Upadhyaya Gram Jyoti Yojana, plans to electrify all villages by 1 May 2018. The current demand for CRGO steel in India is around 2-2.5 million tonnes per annum and is expected to double by the end of 2017.

Queries emailed to the spokespersons of India’s steel ministry and RINL on 5 April remained unanswered. 

This also comes at a time when the steel sector is under stress globally due to a structural demand slowdown in large consumer countries and significant overcapacity in China. As part of its strategy to revive the domestic steel industry, the NDA government has constituted a high-level committee of secretaries on steel to suggest measures needed for the sector’s growth.

Meanwhile, project partners said the steel ministry’s nod is awaited to start the project.

“There were a few normal queries asked at the 22 March meeting related to the capital preparedness of the partners in the CRGO development,” said T. Venugopalan, chief technology officer-new projects, Tata Steel.

“The work on the pilot project will start after the approval of DPR by Council of Scientific and Industrial Research and the boards of the industrial partners,” he added. 

“All issues have been discussed with partners and the ministry of steel,” said a senior NML official who also requested anonymity.

The Narendra Modi-led government launched the Make in India programme in September 2014 to make the country a destination for manufacturing and design. India’s consumption of finished steel was 76.99 million tonnes (MT) for financial year 2014-15 driven primarily by infrastructure creation in railways, roads and highways, and the auto industry. The country has been a net importer of steel with the exception of financial year 2013-14 when it bucked the trend.

Former steel secretary Atul Chaturvedi also believes that there is a lot of potential in the technology space relating to the metal sector.

While the experts termed the development as positive they sounded caution about the future of such collaborations.

“The initiative by the steel makers anchored by the ministry is a step in the right direction but the challenges of collaboration tend to appear sooner or later in such multi-institutional initiatives, more so when the government is involved as a key participant to set the direction of the initiative,” said Dipesh Dipu, partner at Jenissi Management Consultants, a consultancy firm focused on energy and resources. 

However, if the organisation begins to roll and produce results, it will be good for the Indian steel industry that has often struggled with innovation, added Dipu. 


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India to set up pilot project for specialised steel manufacturing

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