Tata Steel expects a clear and stable policy on renewal of mining leases and forest clearances to drive growth in the steel industry.

The year gone by was challenging, with the industry facing regulatory issues and sluggish demand from major consuming sectors such as infrastructure and automobiles, said TV Narendran, MD, Tata Steel, India and South-East Asia.

“We are hopeful that the Government will address the concerns of the steel industry in the new year,” he said in a statement. The company’s production was impacted by mining lease renewal issues, which led to suspension of mining operations. Tata Steel imported iron ore for the first time. “It is ironical that, as a country, we have to import iron ore despite having some of the best reserves in the world,” he added.

Forecasts indicate that the economy will grow at about six per cent, buoyed by a stable government at the Centre, economic reforms and a turnaround in manufacturing. The scope is huge, with the Working Group on Steel for the 12th Plan projecting a crude steel capacity of 140 million tonnes by 2016-17, said Narendran. While the emerging scenario looks positive, he said steelmakers in India face a challenging future, as they may not be able to add capacity to keep pace with the rising demand.

The need of the hour is to steer new investments with appropriate policy support to ensure that production matches growth in consumption, he said.

India is the fourth largest producer and third largest consumer of steel in the world.

The first phase of the Kalinganagar Project of three million tonnes a year capacity will be progressively commissioned from early-2015. Production from the greenfield project will enable us to consolidate our leadership position in the industry, Narendran said.