Steel industry may face disruption post March 2020 on expiry of mining leases: SAIL chief

Another concern for the industry is high input cost, Chaudhary said.

Today the production cost of steel in India is the highest and one of the major factors contributing to this are the taxes, he said.

Royalty is close to 20 percent on the input material, whether it is coal or iron ore. Freight cost is higher than what is being paid in other countries. Electricity also adds to the high production cost, Chaudhary said.

"In India, average production cost of per tonne steel is about $450, whereas in China it is as low as $350 where players get benefit of low tax and incentives," he emphasised.

Coking coal and iron ore are the two key raw materials needed for making steel.

"As far iron ore is concerned, we have it in abundance. The only thing is the judicial allocation has to happen. Coking coal is not available in our country and the whole industry is dependent on import of coking coal, particularly integrated steel sector imports from Australia, Indonesia, the US etc," he said.

All these challenges need to be addressed for meeting the ambitious 300 MT steel production capacity target set by the government under the National Steel Policy, he added.