By Nageshwar Patnaik in Bhubaneswar, October 23, 2018: Leading domestic steel producing companies, including SAIL, JSPL and Mecon Ltd, are among the 38 companies which signed MoUs with Leading Capital Goods (CG) producers from the across the globe on Tuesday envisaging reduction in imports of CGs meant for the steel sector worth Rs 39,400 crore by promoting manufacturing of capital goods in the country.

The MoUs were signed here on the sidelines of Conclave on “Capital goods for steel sector: Manufacture in India” – Union Ministry of Steel, Confederation of Indian Industry (CII) and MECON.

This could lead to substitution of an estimated $5 billion in imported equipment over the next decade in line with the Centre’s ‘Make in India’ initiative.

A dozen top global companies are among the signatories in the MoUs, Union Minister for Steel Chaudhary Birender Singh told media persons.

“In order to ensure that the MOUs culminate into manufacturing of capital goods, a purchase preference policy to cover all purchases of steel products, including capital goods is being worked upon by my Ministry. It will ensure that products / product categories which do not get covered by the DMI & SP Policy will get covered by the proposed policy on the line which has been prescribed by the DIPP. These MoUs are a win-win for both. The foreign manufacturers who will enter into a JV with an Indian firm can get advantage of purchase preference. Indian manufacturers will benefit from the foreign investments and technology and also get to fulfil the eligibility condition of experience”, Singh said assuring a level playing field to global companies.

Some of the companies who signed the pacts were China-based ACRE, Italy based CSM, Luxemburg headquartered Paul Wurth, Danieli Corus- supplier of tailor-made solutions for the primary metals industry and domestic steel makers and heavy equipment manufacturers including SAIL, JSW, Bharat Heavy Electricals Limited, MECON Limited, Heavy Engineering Corporation Limited, among others.

The technological areas in which the pacts were signed were for coke oven, agglomeration, coal washery, blast furnaces, steel making, rolling mills, waste to energy and iron ore crusher and beneficiation.

“The government is focussed on reducing import dependence through the ‘Make in India’ programme. The MoUs are a firm step in this direction as it will help them diversify through expansion of their production facilities and produce the equipment so far being imported,” Singh remarked

As per the National Steel Policy – 2017, India needs to create 300 million tonnes of steel capacity by 2030-31 against the existing 130 mt. The estimated import of plant and equipment, for reaching 300 mt capacity, will be around $25 billion. Further, for meeting the spares requirement, India will have to spend about $500 million annually for import of proprietary and other spares.

“The move towards increasing self-sufficiency in capital goods and substituting imports with domestic produce could go a long way in saving foreign exchange and also boosting the economy and creation of jobs,” observers said.