India’s steel industry is poised to ramp up production and fill the global supply gap as steel prices have skyrocketed amid the Russia-Ukraine conflict, said Union Minister for Steel Ram Chandra Prasad Singh.
Speaking to the Khaleej Times, the minister said India can also meet all of the UAE’s steel supply needs as India’s private steelmakers ramp up production and also seek mutually beneficial partnership deals with UAE steelmakers.
“The UAE exports around 5.5 million tons of steel from other countries. That can be made from India, which is geographically close to the UAE,” said Singh, who is in the UAE to open Steel Week in the India Pavilion at the expo.
Steel, iron and other mineral prices have risen sharply since the Russian invasion of Ukraine, as both countries are major producers and exporters of steel and other minerals. According to Jindal Steel & Power (JSPL), steel prices have increased by 20 percent in the last month. Steel prices per ton are around US$1,200 in Europe, and prices in the Middle East and Africa have reached around US$1,100.
According to Sharma, companies from Europe, the Middle East and Africa are turning to Indian producers to meet demand.
“The conflict between Russia and Ukraine has resulted in a debt shortage of about six to seven million tons of steel per month worldwide, especially in the countries of the Middle East and European countries in the Middle East and North Africa and Europe. VR Sharma, co-chair of the FICCI Steel Committee, told the Khaleej Times.
“So this gap of six million tons per month is a huge gap. We wish the war would end as soon as possible, but it will take time. But for that, the Indian industry and the industry in the United Arab Emirates has a great opportunity to supply materials to the Menalands and Europe,” said Sharma, who is also the managing director of Jindal Steel & Power.
He added that India will produce 130 million tons of steel in 2022. “This is a 30 percent growth from 2021 numbers, so post COVID. So we are well equipped to cover the entire input needs of the UAE, which is around eight to ten million. We can do that without any problems,” he says.
Referring to the capacity expansion of India’s steel industry, the minister said India aims to produce 300 million tons of steel by 2030. “And for that we need investments.”
Singh said the recently signed India-UAE Comprehensive Economic Partnership Agreement (CEPA) will provide the UAE with easier access to India’s metals, minerals and petroleum products. About 90 percent of Indian goods exports to the UAE are likely to be covered by the FTA. It will help create around one million jobs in India.
“India will offer UAE manufacturers opportunities to invest in India’s robust market, SEPA provides a very good framework for enhancing bilateral trade between two countries,” the minister said.
“One of the key things to be showcased at Steel Week is the Production Linked Incentives (PLI) program to encourage specialty steel manufacturing in India. We expect an investment of about 40,000 crores Indian Rs. And we will offer incentives of around US$800 million for steel production facilities in five categories in India,” the minister said.
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