The Lift Line

“It is a no-brainer that if India is to emerge as a competitive steel producer by 2047, the protection extended to the steel industry must be phased down.” (Montek S Ahluwalia, Shishir Gupta and Rishita Sachdeva, “Steel policy for 2047 needs to shift focus: from protection to competition”, The Indian Express, 2 November 2026)

Why This Editorial Matters for Your Exam

In the news: in a column in The Indian Express on 2 November 2026, Montek S Ahluwalia (distinguished fellow, CSEP, and former deputy chairman of the Planning Commission), Shishir Gupta (senior fellow, CSEP) and Rishita Sachdeva (associate fellow, CSEP) respond to the Ministry of Steel’s Draft National Steel Policy Vision 2047, released in October 2026 for comments. Their case: the industry’s profits rest on protection, and a plan for 2047 must phase it down.

The ministry’s page invited stakeholders to “submit their suggestions by 30th Oct’26”, so the document is still a draft for consultation, not a final policy. For background, steel has appeared in recent coverage through the 22 October deep dive on the core industries and the editorial on it, “Canary in the coal mine”, and Quality Control Orders through the editorial on inbound investment, the labour codes and QCOs. For green steel, see the Bharat Steel 2026 summit. This column asks a sharper question: is the industry competitive, or protected?

UPSC relevance:

  • GS Paper 3: industrial policy; effects of liberalisation on the economy; changes in industrial policy and their effects on industrial growth; mining and mineral resources.
  • Prelims: Draft National Steel Policy Vision 2047 targets; National Steel Policy 2017; PLI Scheme for Specialty Steel; DGTR and trade remedies; safeguard duty; Quality Control Orders under the BIS Act, 2016.
  • Essay and Interview: protection versus competition; the role of public-sector enterprises.

The Crux in 60 Words

India is now the world’s second-largest steel producer, and its steelmakers are unusually profitable. The authors argue that the profits come from shelter: an export duty that keeps iron ore cheap, import duties well above ASEAN’s and Quality Control Orders on steel products. Downstream users pay the price, and a 2047 policy must phase protection down.

Key Arguments at a Glance

Ahluwalia, Gupta and Sachdeva argue that the steel industry’s high profits rest on cheap iron ore and high protection rather than efficiency, so a policy for 2047 must phase protection down and expose the industry to competition.

Supporting
  • In the authors’ account, a 30 per cent export duty on high-grade iron ore keeps domestic ore 30-40 per cent below world prices, underpaying mineral-rich regions and blunting the incentive to mine.
  • They count tariff protection (a 7.5 per cent import tariff plus an 11.5 per cent safeguard duty, against 3-4 per cent in ASEAN) and Quality Control Orders on 228 steel products as barriers to imports.
  • The column says domestic hot-rolled coil sells at a 6-7 per cent premium over Japan, raising costs for construction, automobiles and the small exporters that use steel.
  • Its own simulation shows profits of the largest firms falling sharply if tariffs were cut or the ore duty removed, which it reads as proof that profits depend on protection.
Counter

Protection has a stated purpose: the 2025 safeguard duty was imposed to shield the domestic industry, and the draft policy keeps trade remedies as a tool where unfair trade practices are established, to be timely, evidence-based, targeted and proportionate. An industry that must nearly triple its capacity, import most of its coking coal and cut its emissions intensity may need breathing room, and a quick phase-out could hit the public-sector major hardest.
The column’s own figures (its duty arithmetic and an unpublished table) are not fully set out.

Way Forward

A dated, calibrated path for tariffs towards ASEAN levels over five years, a review of steel QCOs, a fresh look at the ore export duty and at exploration incentives in mining policy, and a plan for the public-sector major’s weakest plants, all written into the final policy rather than left implicit.

Background and Context

What the draft policy says

The Ministry of Steel uploaded the Draft National Steel Policy Vision 2047 in October 2026 and asked for comments by 30 October 2026. Its executive summary records the growth so far: “India’s crude steel production has increased from about 89 million tonne (MT) in 2014-15 to 170 MT in 2025-26, while finished steel consumption has risen from 77 MT to 164 MT.” India’s share of world crude steel output rose from 5.2 per cent in 2014 to about 8.9 per cent in 2025, from an installed capacity of 220 million tonnes per annum.

Draft target for 2047 Figure
Finished steel demand 505 MT
Crude steel capacity 604 MT
Per capita steel consumption 302 kg
Steel exports 45 MT
Emissions intensity 1.54 tCO2 per tonne of crude steel

Source: Ministry of Steel, Draft National Steel Policy Vision 2047 (draft for comments, October 2026).

The draft also sets out the constraints. India is “largely self-sufficient in iron ore” but “imports nearly 92% of its coking coal requirement”; raw materials make up “65-70% of steelmaking costs”; and steel contributes about 10-12 per cent of India’s carbon dioxide emissions, at 2.54 tonnes of CO2 per tonne of crude steel against a global average of 1.92. On imports, it says that “where unfair trade practices are established, timely and evidence-based anti-dumping, countervailing and safeguard measures should be pursued, in coordination with the Directorate General of Trade Remedies (DGTR)”, and that such interventions “should remain targeted and proportionate”. The earlier policy is the National Steel Policy 2017.

The protection already in place

In April 2025 the government imposed a provisional safeguard duty “at the rate of 12% (twelve percent) ad valorem for 200 days on imports of certain Non-Alloy and Alloy Steel Flat Products”, as a reply in the Lok Sabha later recorded. The duty has been definitive since 2025: Notification No. 02/2025-Customs (SG) of 30 December 2025 levies “12 percent ad valorem” on imports from 21 April 2025 to 20 April 2026, “11.5 percent ad valorem” from 21 April 2026 to 20 April 2027 and “11 percent ad valorem” from 21 April 2027 to 20 April 2028. The same reply lists anti-dumping and countervailing duties on specific products and the “Introduction of Steel Quality Control Order thereby banning sub-standard/ defective steel products in domestic market as well as imports”. The ministry’s QCO page lists further orders in 2026, including exemption orders for some steel products.

The Analysis

The column builds its case in six steps.

1. Success, by one measure. India, the authors note, went from “producing less than 5 per cent of global steel and ranking ninth in 2000” to “the world’s second-largest steel producer”, at a level that matches the draft policy’s figure for 2025-26. They add that India is “very far behind China at 961 Mt”, which is their figure.

2. Profitable, but why? In their analysis the industry’s average profitability (EBITDA over sales) for 2000-25 was “around 15 per cent”, 3-4 per cent higher than the rest of Indian manufacturing, and the top three firms beat “their biggest global counterparts” by 3-4 percentage points (2015-24). Their question: “does this profitability reflect greater efficiency or high protection?”

3. Three props. The column’s answer is protection, in three forms:

  • Cheap ore: “An export duty of 30 per cent on iron ore with more than 58 per cent iron content makes the domestic price of the ore 30-40 per cent lower than global prices.” In effect, the authors write, “our iron-mining resources are underpaid to benefit the steel industry”, and the incentive to mine falls.
  • Tariffs: “a 7.5 per cent import tariff, with an 11.5 per cent safeguard duty, which makes the duty rate 18 per cent”, against “between 3-4 per cent” in ASEAN.
  • QCOs: orders on “228 steel products”; “The Gauba Committee has reportedly recommended the removal of 122 steel products from the QCO list. However, thus far, only 59 products have been suspended.”

A careful reader should hold these as the column’s figures. As printed, 7.5 and 11.5 add up to 19, not 18, and the column does not show its working. The column’s 11.5 per cent does match the definitive safeguard duty for the year from 21 April 2026 (see Background). The QCO counts are hedged with “reportedly”.

4. Who pays. “Consequently, domestic firms sell steel (hot-rolled coil) at a 6-7 per cent premium over a high-cost country like Japan.” The authors put steel at “around 15 per cent of total project cost” in construction and “roughly 5 per cent of the raw material” in automobiles, and note that small and medium exporters face high input costs.

5. The stress test. The column models two scenarios for the largest firms (it does not name them). If tariffs fall so that domestic steel is about 6 per cent cheaper, the largest private firm’s profits fall 25 per cent, the largest public-sector firm’s 50 per cent and the fastest-growing large private firm’s 40 per cent. If the ore export duty goes and firms buy ore at world prices, the fastest-growing private firm’s profits fall 95 per cent and the public-sector firm’s “becomes negative”. The table behind these numbers is not reproduced in the column’s text.

6. Four levers. The authors write that “the ministry would have done well to spell out what needs to be done”, and offer:

  • Cut tariffs and non-tariff barriers “in a calibrated way over five years to the level of Southeast Asian Nations (ASEAN)”, and “immediately remove the QCOs from steel products”. Pharmaceuticals and auto components, they argue, show that lower protection need not hurt: tariffs there fell “from around 40 per cent in 2000 to 10-15 per cent in 2023” while export shares rose.
  • Privatise “some of the plants” of the public-sector major. They note that since 2000 SAIL’s market share has “declined from 30 per cent to 10 per cent”, JSW’s has risen “from 1 per cent to 12 per cent by 2025” and Tata Steel has held “a 11-13 per cent share”.
  • Abolish the ore export duty “to unlock value creation and increase its export revenues”, exposing steelmakers to world ore prices.
  • Overhaul mining policy: today, they write, those who find new mines “have to surrender the newly discovered mines and try to get them back in a future auction”, one reason “only 10 per cent of India’s obvious geological potential has been explored so far”. They would follow “the policy followed in Australia and other mineral-rich countries”.

The column closes with Jamsetji Tata: “Would Jamsetji have asked for the mix of duties and QCOs we now have?”

Data and Institutions Vault

Prelims-grade facts:

Draft National Steel Policy Vision 2047 (Ministry of Steel, draft):

  • Comments: invited until 30 October 2026; a draft for consultation, not a final policy.
  • Targets for 2047: crude steel capacity 604 MT; finished steel demand 505 MT; per capita consumption 302 kg; exports 45 MT.
  • Emissions intensity: 2.54 tCO2 per tonne of crude steel now (global average 1.92); target 1.54 by 2047; Net Zero by 2070.
  • Today: crude steel 170 MT in 2025-26 (89 MT in 2014-15); installed capacity 220 MTPA; world’s second-largest producer.
  • Inputs: coking coal nearly 92% imported; raw materials 65-70% of costs.

Earlier policy and schemes:

  • National Steel Policy 2017: 300 MT capacity, 255 MT production, 158 kg per capita by 2030-31.
  • PLI Scheme for Specialty Steel: approved 22 July 2021; Rs 6,322 crore; 2023-24 to 2027-28.

Trade remedies and standards:

  • DGTR: named in May 2018; single window for anti-dumping, CVD and safeguard measures.
  • Safeguard duty on certain flat steel: provisional 12% ad valorem for 200 days (April 2025).
  • Definitive safeguard duty (Notification No. 02/2025-Customs (SG), 30 December 2025): 12%, then 11.5% from 21 April 2026, 11% from 21 April 2027, to 20 April 2028.
  • QCOs: under section 16(1), BIS Act, 2016 (Act No. 11 of 2016); the Standard Mark made compulsory by Gazette order.

⚠️ Watch the trap: the Vision 2047 document is a draft; comments were due by 30 October 2026, and it is not a final policy, so do not call it “the National Steel Policy 2047” as if adopted. The 2017 policy targets 2030-31 (300 MT capacity, 158 kg); the 2047 draft targets 604 MT capacity and 302 kg. The safeguard duty is now a definitive 11.5 per cent (21 April 2026 to 20 April 2027); the column’s 7.5 and 11.5 per cent add up to 19, not its “18 per cent”. QCOs come from the BIS Act, 2016, not from DGTR.

The Debate

The authors’ case. Profits well above manufacturing and above global peers, in an industry sheltered by tariffs, QCOs and cheap ore, point to protection rather than efficiency. The costs fall on construction, automobiles, small exporters and mineral-rich regions. Pharmaceuticals and auto components grew more competitive as tariffs fell, so steel can too, if the path is announced and gradual.

The other side. Protection is not without reason: the 2025 safeguard duty was imposed to shield the domestic industry, and the draft policy keeps trade remedies, to be used “where unfair trade practices are established” in a “timely and evidence-based” way. The draft’s own constraints are heavy: most coking coal is imported, raw materials dominate costs, and the sector must cut its emissions intensity while nearly tripling capacity. The column’s own simulation implies that a quick phase-out would push the public-sector major into losses. And some of its numbers are hard to check: the duty arithmetic does not add up as printed, and the profit table is not reproduced.

The balanced verdict. The authors make a strong case that permanent shelter is a poor base for an export target, and that the draft should set out how and when protection will taper. But the pace matters: a dated, calibrated schedule (their own proposal is five years) is different from immediate removal, and mining and ore policy changes would need their own consultation.

How to Think About This

Use a “who gains, who pays, for how long” test on any protection question:

  1. Instrument: which tool is it (customs duty, safeguard, anti-dumping, QCO, export duty)? Each has a different law and purpose.
  2. Who gains: the protected producers, including public-sector firms.
  3. Who pays: the users downstream (builders, carmakers, small exporters) and, with an export duty, the mining regions.
  4. For how long: is there an end date? A safeguard is time-bound by design; a tariff can stay for decades.
  5. What replaces it: what makes the industry competitive once protection goes (ore access, mining reform, technology, green steel)?

Then separate the record from the argument: the draft’s targets and the safeguard duty are official; the profit margins, price premiums and simulations are the authors’ analysis.

Diagram-in-Words

Cheap ore (export duty), import duties and QCOs → high profits for steelmakers → costlier steel for builders, carmakers and small exporters → the authors’ test: profits fall sharply without protection → their remedy: phase protection down over five years, free ore and reform mining

Read it left to right: the first box is the protection the authors count, the last is what they want the 2047 policy to say.

✍️ Mains Answer Framework
Question

India's steel industry is profitable but heavily protected. In the context of the Draft National Steel Policy Vision 2047, critically examine the case for phasing down tariff and non-tariff protection for steel. (250 words)

Introduction

India’s crude steel production rose from about 89 million tonnes in 2014-15 to 170 million tonnes in 2025-26, making it the world’s second-largest producer. The Ministry of Steel’s Draft National Steel Policy Vision 2047 aims at 604 million tonnes of crude steel capacity, 302 kg per capita consumption and 45 million tonnes of exports by 2047.
Whether protection helps or hinders that goal is now the central question.

Body

Instruments of protection. Steel is shielded by customs duties, a safeguard duty on certain flat products (provisional from April 2025, made definitive in December 2025 at 12, 11.5 and 11 per cent for the three years to April 2028), anti-dumping and countervailing duties, handled by the Directorate General of Trade Remedies (DGTR), Quality Control Orders under section 16 of the Bureau of Indian Standards Act, 2016, and an export duty on high-grade iron ore that lowers domestic ore prices.
Case for protection. Import surges can undercut domestic producers during a capacity build-out; the sector imports about 92 per cent of its coking coal, raw materials make up 65-70 per cent of costs, and decarbonisation from 2.54 tonnes of CO2 per tonne of crude steel to 1.54 by 2047 needs investment.
Case against. Protection raises input costs for construction, automobiles and small exporters, and cheap domestic ore weakens the incentive to explore and mine.
High profits under protection may reflect shelter rather than efficiency. Balance.
Protection should be temporary and targeted: trade remedies used on evidence, QCOs limited to genuine quality needs, and duties phased down on an announced schedule.

Conclusion

A steel sector that aims to be a major exporter by 2047 must be able to compete at world prices. A credible, time-bound path from protection to competitiveness, combined with mining reform and support for green steel, would serve both the industry and the downstream economy that depends on it.

Interview Angle

"Steelmakers want protection from imports, while builders, carmakers and small exporters want cheaper steel. If you were advising the Ministry of Steel, how would you balance the two?"

Takeaway Box

  • Lift line: “It is a no-brainer that if India is to emerge as a competitive steel producer by 2047, the protection extended to the steel industry must be phased down.”
  • Core idea: high profits under protection can hide weak competitiveness; a 2047 policy needs a dated path from shelter to competition.
  • Prelims hooks: Draft NSP Vision 2047 targets; NSP 2017 (targets for 2030-31); PLI Specialty Steel; DGTR (2018); safeguard duty on flat steel (provisional April 2025; definitive December 2025, 12, 11.5 and 11 per cent to April 2028); QCOs under BIS Act, 2016, s.16(1).
  • Ethics and Interview angle: public interest against producer interest: how does a regulator weigh the lobbying of a few large firms against diffuse costs borne by many users?
  • Probable question: “Examine the role of trade remedies such as safeguard and anti-dumping duties in protecting India’s steel industry, and their effects on downstream sectors.” (GS3, 150 words)

Sources:

  • Montek S Ahluwalia, Shishir Gupta and Rishita Sachdeva, “Steel policy for 2047 needs to shift focus: from protection to competition”, The Indian Express, 2 November 2026
  • Ministry of Steel, Draft National Steel Policy Vision 2047 and its consultation page (comments by 30 October 2026); All India Radio, 13 October 2026
  • PIB: Cabinet approves National Steel Policy 2017 (3 May 2017); PLI Scheme for Specialty Steel (22 July 2021); safeguard duty on steel (21 April 2025); Lok Sabha reply on steel imports (5 August 2025)
  • Ministry of Steel, Quality Control Orders page; The Bureau of Indian Standards Act, 2016, section 16
  • Directorate General of Trade Remedies, About the Department

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