<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>India will become the second largest producer of steel by 2013 with an installed annual production capacity of 120 mn tonnes, according to Minister for Steel Beni Prasad Verma. Verma made the announcement at the 5th India Steel Summit held on 26th July.<br><br>At present, India ranks fourth in the world with production of about 80 mn tones. China however, leads the pack. In fact, in 2010, China's share in the world steel output was as much as 44 per cent. Currently, it is also the largest steel consuming country in the world. But with Indian domestic steel demand growing at about 10 per cent, we might just have a shot at the title. Manufacturing and construction, which account for most of the steel demand, are expected to buoy the industry's growth.<br><br>The real picture however, is not as rosy. Factors like long-drawn clearance processes, increasing complexity in operations and difficulty in obtaining raw materials are bogging down production. And if the bottlenecks remain unchecked, steel production might fall short of demand – a scenario that industry experts think could turn us into net importers.<br><br>Alarm bells are already sounding in the industry particularly owing to land acquisition and environmental clearance hurdles. P.K Misra, Secretary, Ministry of Steel went as far as to term land acquisition as the "most contentious and challenging issue of our times". He called for direct negotiations at market rate to mitigate the issue.<br><br>Meanwhile, the steel industry also faces a scarcity of coking coal. And with the fate of over 100 iron ore mines (down South) hanging in balance, production could take a severe hit. Ironically, even with surplus iron ore production in the country, many steel producers still look outwards for accessing the mineral.<br><br>Nevertheless, several Greenfield as well as Brownfield projects are underway. Tata Steel plans to set up a 6 lakh tonnes facility in Jamshedpur by 2012 while SAIL plans to increase its share of value-added products from 37 per cent to 55 per cent in 2012-13. Strategic relationships are also being explored to enhance technology capabilities – SAIL with Japan's Kobe Steel, JSW Steel with JFE Steel Corp in 2008 and Tata Steel's joint venture with Nippon Steel.<br><br>On the government front, schemes like NREGA and Indira Awas Yojana are expected increase steel consumption by developing rural areas. The ministry, for the purpose of tackling the many challenges, is formulating a New National Policy and a vision document on Steel sector that will project a medium term horizon of 10 years and a long term vision of 25 years. <br><br>Four Task Force committees have also been set up to engage in consultations with stakeholders and the industry. Their report is expected to be ready by December of this year.</p>