Steel minister Chaudhary Birender Singh on Thursday said the country’s steel production was not headed towards excess capacity and it would continue adding capacity even though many such as China and the European Union were cutting back production and mothballing steel plants.

“We are on a different footing and that’s why we (have) decided in 2017 to have a capacity of 300 million tonnes (mt), which is at present... is more than the double, rather 2.5 times more than our present capacity,” the steel minister said.

China pledged in 2016 to cut 150mt of excess capacity by 2020.

China’s “excess capacity” problem has been on top of the agenda at most steel and WTO meets. Several steel mills had been shut down in countries such as the UK and Spain.

According to the World Steel Association, India is now the world’s third largest producer, a few million tonnes behind Japan but only around 13 per cent of the output of China, which is the top producer.

Excess production of steel the world over is a point of discussion globally, Singh said, adding “but in India the government stand is to augment it to 300mt”.

“But, we made our stand very clear in that global forum of 34 countries and they have also accepted what we argued. And the level of consumption in the last two years has been 7.9 per cent (growth) in our country. That is one argument for having a capacity of 300mt.

“And if you see last eight months steel production figures in the current calendar year 2018, India has become the second largest steel producer in the world,” the minister added.

India’s steel production has been growing at the rate of 6.7 per cent, which is the highest growth in output amongst the major economies of the world.

India requires investment of around Rs 10 lakh crore in steel to raise production to 300 mt per annum by 2031 from 102mt now. The investment has however now been scaled down to Rs 8.8 lakh crore given the global economic slowdown.

The government will introduce policies for more foreign investment in the sector and accelerate local research and development to cut the FDI bill at the same time, the steel minister had earlier indicated.

India’s new steel policy aims at raising production to 150mt within just two years and to 300mt by 2031.