India’s leading private sector steel-maker, Tata Steel Limited, feels most of the current problems in the country’s steel industry would be solved if the government increases its spending on infrastructure projects and works to reduce transportation bottlenecks and costs.
“From my side, I would like the government to accelerate expenditure on infrastructure. I think that’s good for the economy, that’s good for the country. In the long term, we should look at infrastructure, we should look at demand creation. If the government invest in infrastructure that will sustain the demand for steel,” the company’s Managing Director (India and South East Asia) T V Narendran said.
Talking to reporters on the sidelines of inauguration of the new office of the Indian Iron and Steel Sector Skill Council, Narendran said while the Indian government, both the Centre and at the state levels, are improving ease of doing business, there is need to look at the cost of doing business.
“We also have to look at the cost of doing business in India and see how we can address the cost of doing business in India. The industry can control the cost within the gate, but the company cannot control costs outside the gate. So inside the gate, we will make sure that we remain the most cost competitive in the world. But outside the gate, there are costs, which are more in the government’s control, whether state or centre,” he said.
“So we will ask the government to look at that. I say this because a lot of cost outside the gate is because of poor infrastructure such as transportation time, transportation cost etc.,” Narendran said.
Asked if the company is not in favour of safeguard duty on steel, the Tata Steel MD said that safeguard is also important as a short term measure, but for long term growth the government spending on infrastructure and ease of doing business is more important.
“If you look at the long term, why did not the steel industry asked for safeguard duty till last year? We were competing even though the import duty was same. We had no problem competing with China or Korea or Japan till 2014. Nobody asked for a safeguard duty or import duty even though India has one of the lowest import duties in the world,” he pointed.
Narendran said the only reason last year the industry had asked for the safeguard duty or something like that was because steel prices crashed and China had a problem, which prompted them to export.
“Why should we (Indian steel industry) suffer for the problems in China? he asked.
Source: India Steel Market Watch