Lucknow: Steel consumption in India is likely to reach around 122 million tonnes (mt) by 2015 from the current annual base of about 70 mt, industry body Assocham said on Thursday.

Rising demand from sectors like agriculture, consumer durables, capital goods, oil and gas and water is the key growth driver behind this upward spiraling demand of steel, Assocham secretary general D S Rawat said here while releasing the chamber’s study on Indian Steel Sector.

"Given the growth prospects for the economy, steel production in India is likely to double from the existing level in the years to come," he said.

It requires a vision encompassing availability of key raw material, infrastructure, research, development, rehabilitation and human resource development, he added.

"Domestic steel companies must target countries like Australia and Mozambique to make up for the low reserves of coking coal," Rawat said.

"Considering that India is self-reliant in iron ore production, the steel companies must intensify efforts to develop technologies to make use of iron ore fines and thermal coal for steel production," he said.

Assocham has suggested the Ministry of Steel to form a core group in this regard consisting of representatives from academics, industry and equipment designer capable of using locally available raw material.

"Since, profitability of our steel industry is based on price of coking coal in the international market, thus efforts should be made to intensify use of technologies that can utilise high ash coke and iron ore fines available locally," said Rawat.

There is a huge potential for consumption of steel in the rural sector where steel and energy consumption is abysmally low and must be augmented for socio-economic development and achieve the desired goal of inclusive growth.

Besides demand for steel in traditional sectors and high-tech engineering industries like construction, fertilisers, petrochemicals and power generation is likely to swell further.

Demand for cold rolled grain oriented (CRGO) and cold rolled non oriented (CRNO) steel are bound to rise on the back of large scale capacity expansion in power sector and associated infrastructures, he added.