India’s steel imports are seen at 10 million tonnes (mt) this fiscal, up nearly 43% year- on-year, as companies find it difficult to expand amid racing domestic demand, Tata Steel Ltd vice-chairman B. Muthuraman said.

“India’s steel demand is growing, but not enough capacity is getting created due to issues related to land acquisition and lack of infrastructure,” said Muthuraman, who is also the president of industry lobby group Confederation of Indian Industry. “In recent years, India has become a net importer of steel and steel imports could go up to 10 mt in FY12.”   

Demand for steel in Asia’s third largest economy is rising at 10% a year as the country builds infrastructure at a rapid pace and rising incomes fuel demand for automobiles and consumer durables.

The government has targeted steel output of 120 mt by 2012, but so far production has been at around 70 mt with several projects getting delayed owing to regulatory hurdles and various forms of opposition.

The country was a net exporter of steel till about 2005-06, but has turned into a net importer with sectors such as automobiles needing more specialized steel that is not available locally.

“We need to build more capacities in India, which is why we are looking at the new manufacturing policy—howto make land acquisitionsimpler, how to make the rehabilitation process simpler, how to get the infrastructure in order, and how to speed up major projects,” Muthuraman said.

With regard to Tata Steel, Muthuraman said the company is adding 10 mt of capacity in the next five-six years, restructuring European operations and enhancing raw material security.

He referred to these as “the three pillars on which the next five-year journey will progress”, adding the group currently produces 27 mt of steel.

The company is not looking for acquisitions yet, having purchased Anglo-Dutch steel maker Corus four years ago.

“We just want to digest what we have acquired,” Muthuraman said. He added that steel prices are seen rising in the near future.

“Commodity prices are going up. Coal is very high, iron ore is very high and that is why steel companies have been increasing prices. I do see some more increases,” he said.