Dr Aruna Sharma, the former Secretary in the ministries of Steel and MeitY within the Government of India, discusses with Kanishka Ramchandani the scope stainless steel has as a vital industrial material.
Dr Aruna Sharma is an accomplished Practitioner Development Economist, renowned for her distinguished career in public service and her significant contributions to policy development and economic growth in India. She has served as Secretary in the ministries of Steel and MeitY within the Government of India. She spearheaded the rollout of Direct Benefit Transfer system and played a pivotal role in establishing a common household database, leading to a revolutionary shift in the implementation of social welfare schemes.
As a key architect of India’s steel policy, her contributions have been instrumental in shaping the growth and sustainability of the nation’s steel industry. She championed the Steel Policy of 2017, which provided a comprehensive roadmap that continues to propel the progress of the steel sector. She has been on the board of MFIN and Jindal Power and Steel. She is presently in board of Arjas Steel, Welspun infra, Logically (fake news) and 3i Infotech, and an advisory board member for Stainless Today.
What is your expert opinion on the use of stainless steel in sectors such as infrastructure, agriculture, housing and power?
There is a huge opportunity to replace existing materials with stainless steel, which is resistant to corrosion, has a high tensile strength, is apt for infrastructure. It also has great aesthetic appeal and literally zero maintenance. You don’t have to repaint or redo or look at it.
With regards to cost effectiveness, it is 8-10 per cent costlier than aluminium, but this cost justifies the lifecycle of stainless steel as it has no maintenance at all. Therefore, it is becoming a preferred choice with all the technical people who are in construction, infrastructure and housing and building sectors. Even the railway coaches are now completely made of stainless steel.
Which provisions in the National Steel Policy impacts stainless steel predominantly?
With regards to the National Steel Policy 2017, at that time, steel was not doing very well and many companies were going in National Company Law Tribunal (NCLT). So, we thought we need to have a holistic long-term policy with corrections to be done. The first correction we did was in the General Financial Rules (GFR), which is guiding the government’s procurement for choice of material.
We replaced the cost of the material with lifecycle costs, so steel become the preferred material. The idea of having NSP 2017 was to focus on the material.
To come down to stainless steel per se, we have a specific provision in two places. One is in 4.3.8, where we have talked about nickel, because nickel is the major component in stainless steel and we import it. Therefore, there has been a mention about it that we have to maybe acquire the assets globally, so that we have a steady supply of nickel.
Furthermore, we encouraged research within India, such as availability of nickel in the Sukinda Valley in Orissa, which was mentioned in NSP 2017 as provisioning raw material for stainless steel, besides the scrap. But specifically in 4.9, alloy steel and stainless steel have been mentioned along with why it is important to focus on stainless steel.
Having said that, there is a need to have a separate policy for stainless steel. And the time for that has come, it is already with the ministry and early in 2024, they were going to release it.
I hope that very soon it sees the light of the day, as it is very comprehensive and completely focusses on stainless steel.
Are there any policies that are focused on making the manufacturing of stainless steel more eco-friendly or sustainable?
Yes, the overall green steel policy also covers stainless steel. You will be surprised to know that stainless steel per se is eco-friendly, because it is basically based on scrap, which is the raw material. It is 100 per cent recyclable. You don’t have to replace it quickly. It is actually an energy saver, a low waste, low emission kind of a material. There is nothing that affects the quality if you use this recycled material, which is sustainable with a long lifecycle.
Which regulatory policies should stainless steel producers be aware of in order to avoid operate efficiently?
Yes. There are certain parameters about the use of nickel such as what percentage of nickel is being used by stainless steel manufacturers, what unique property comes with it when it is used 8 to 10 percent, etc.
In stainless steel utensils, the quantity of nickel plays an important role as excess nickel is a health hazard and it would also make the utensils brittle. Therefore, the quality and quantity of nickel used is very important.
How much are you expecting the consumption of stainless steel to improve in the next five years?
The international standard and global average is 6kg per capita.
We, in India, are still at 2.5kg per capita. We have enhanced it to 2.8kg but there is immense potential. We can straight up double the consumption, and we are doing it steadily.
For instance, the Indian railways have adopted stainless steel, not just in making fittings, but also for engineering the entire coach. It is also being increasingly used in the manufacturing, buildings and construction sectors. So, there is a possibility for us to reach 6kg per capita from the existing 2.5-2.8kg. In the next five years, it will reach 4kg per capita.
By 2030, it should be our target to reach 6kg per capita. There are some issues that need to be resolved, and I don’t see any reason why we should not be able to achieve this target.
How important is the Make in India initiative for the stainless steel sector?
There are certain policies that are not favouring ‘Make in India.’ For instance, anti-dumping and power tariff. While we are talking about clean energy, we are making power more expensive. Even power credits are costly.
Generally, the steel industry is on an earn-and-invest mode. After the NCLT episodes, steel manufacturers are taking minimal loans, prompting the savings to flow back into the business instead of consumption by the proprietors or investing or diversifying into other businesses. This is a good sign. So, they are using less of credit and more of their savings and earnings.
However, the major thing is we need to have consistent dumping principles. If any country, especially China, is dumping steel in India and there are huge concessions offered, the difference is 7-8 per cent between the manufacturing cost in India vis-a-vis the dumping. Now, it may look cheap but it has higher nickel content. That’s where Bureau of Indian Standards (BIA) plays an important role to maintain quality of the product. It is important to have non-trade barriers of quality to ensure that low quality stainless steel is not entering India, and is not imported at cheaper price.
The other challenge is the availability of scrap. Stainless steel manufacturers are dependent on imported raw materials. So, logistic bottlenecks are always there. It is important that even though manufacturing of stainless steel is very competitive, 99 per cent of it will be consumed in India alone and only maybe 1-2 per cent will be exported. Such factors deter the ‘Make in India’ philosophy.
It is important to have logical provisions in ‘Make in India’ to ensure Indian stainless steel manufacturing is not put at a disadvantage. For example, after the removal of the anti-dumping duty, the import of raw materials for stainless steel increased by 117 per cent. That’s huge hike and it goes against the principals of ‘Make in India.’ Bottlenecks like these and off-the-cuff actions have to be avoided.
What is the government doing to support Indian manufacturers vis-a-vis their global competition?
In a competitive world, there are absolutely no problems at all.
With Indian manufacturing technology and capability and the ability to produce a range of quality of stainless steel – there is absolutely no problem. What is important is that you have to ensure that they are not exploited.
Amidst the challenges posed by competition such as China, where there is a surge in the domestic production and then they want to dump it elsewhere. The dump comes to India through different routes like Indonesia or even directly from China. Once the stainless steel policy comes into place, I am sure it will take care of this.
There is no need of protection. What is needed is a fair play and fair competing speed. That is what the stainless steel manufacturers require in India.
What kind of challenges is the stainless steel sector facing?
The biggest challenge is that we have to reimpose the anti-dumping rule.
There has been an investigation by the Directive General of Trade Remedies (DGTR) on welded pipes from Thailand and Vietnam. This investigation also concerns the stainless steel seamless tubes and pipes, which originate in and are exported from China.
It is very important that decisions are made quickly. These are World Trade Organisation (WTO) compliant principle. It is not protectionism.
DGTR is the agency that investigates independently as a third party, whether a trade practice is creating an injury to the people of our country. In case there is an injury to the people in stainless steel manufacturing, then one should not be hesitant in imposing the anti-dumping law. So, it is very important that these duties have to be imposed in a consistent manner after due diligence.
What are your views on the recyclability of stainless steel?
Stainless steel is completely recyclable. The competition for stainless steel comes from different types of aluminium alloys. Although stainless steel requires heavy machinery for cutting, which adds to the costs, it is anti-corrosive and does not require any maintenance, which makes it more sustainable. Moreover, the look and feel of stainless steel is more beautiful than aluminium.
What do you think about the Stainless Today platform?
I think it’s a wonderful initiative you have taken. I must congratulate you for the same. I realised that I went into such meticulous details while formulating the National Steel Policy of 2017, which is still a guiding factor. But for stainless steel, we just put one section and I regret that. Therefore, I assisted in drafting the stainless steel policy post my retirement. It is very important to talk about stainless steel separately, since the sector has its own specific issues. Stainless steel has a potential to reach to 6kg per capita in India. With our long coastal line, it has a huge market potential, because this is what engineers struggle with. They need a good anti-corrosive material. In India, with limited resources, we can’t have constant maintenance expenditure, if you use a corrosive material. We have to use the steel and in steel, we have to use stainless steel.
So, I appreciate the Stainless Today platform. I think it’ll go a long way!
Dr Aruna Sharma’s groundbreaking work ‘Resource Convergence Mantra’ introduced the concept of convergence in schemes, optimising the utilisation of resources. Her book ‘U@Game Changer,’ available in multiple languages, serves as a transformative guide for public representatives, equipping them with the knowledge and tools necessary to drive positive change. Her latest publication ‘Dancing towards the $5 Trillion Economy on Holistic Beat’ is a testament to her commitment to inclusive and sustainable growth. Dr Aruna Sharma continues to be a guiding voice for policymakers and businesses through her expert counsel and insightful writings across diverse domains.
