Leaders in the industry stress that in order to guarantee fair competition for domestic manufacturers, policy enablers are necessary.
In order to combat unfairly priced imports and encourage capital expenditure (capex) investments in the steel industry, safeguard duties are crucial, according to Kaushik Chatterjee, the executive director and chief financial officer of Tata Steel, and Jayant Acharya, the deputy MD of JSW Steel.
Policy Enables Necessary For Fair Competition: Indian Steel Industry Leaders
With ₹11 lakh crore spent on infrastructure last year, mostly from public investment, India’s capital expenditure push is still strong.
Chatterjee emphasizes that effective policies are necessary for the steel industry to preserve competitiveness and ensure returns on capital due to its global exposure.
He stated, “I think India is on a multi-decadal path from a growth perspective… we had about ₹11 lakh crore spending on infra, and obviously public spending is a big part of the push. So I think… at least from a heavy capex perspective, there are opportunities to grow, but the environment, especially because in a company or an industry like steel, it’s a globally exposed industry… we just need to ensure that the enablers, from a policy point of view, do not expose us to unfairly priced imports.”
Despite sectoral weaknesses in domestic demand, there is still a lot of optimism about the infrastructure and automotive sectors’ recovery.
Global Trade and Pricing Impacted By China’s Steel Export Volumes
Global trade and pricing have been impacted by China’s steel export volumes, which have increased from the typical 60–70 million tonnes (MT) to over 110 MT.
India’s response will be critical in determining the stability of policy for capital expenditures as more than 30 nations look into China’s steel exports.
Acharya reaffirms worries that, despite robust domestic demand, trade flows from China and Free Trade Agreement (FTA) nations could upset India’s market.
Significant investments are being made because the steel industry anticipates an annual incremental demand of about 15 MT. As per Acharya, “The Indian demand, as Kaushik rightly said, is really good on the medium term… I think India is going to see a very good story. So the steel industry has a large opportunity.
Although the government has kept the budget at ₹11 lakh crore with a 10–17% increase, Acharya admits that while the budget is good for consumption, the capital expenditures could have been better.
