The government has rolled back the export duties it had imposed on steel and iron ore. What are your views on the impact on the Indian steel industry?
We appreciate the fact that the government received a call in May to introduce export duties due to inflation concerns. We believe it is temporary and so I’m glad it has been removed because I firmly believe that India is a great place to produce steel.
We have to make steel in India, not only for India but for the world. India has a great opportunity to export a lot of steel as most of the major steel exporting countries import iron ore whereas we have our own iron ore and steel mills are usually built in some of the most porous parts of the country. So this is a great opportunity for us to add value to our iron ore, create jobs in weaker parts of the country, and build a large scale industry that is globally competitive. So we welcome the move.
In addition, there are still a number of challenges such as the price of coking coal and raw materials. So other than that, what are you expecting from the government?
Coking coal is obviously a problem because we don’t have too much coking coal, but we can do better to utilize the coking coal available domestically. There is more than what we can do. We talk to the government about it, but mostly we depend on imports for coking coal.
It’s coming from Australia, Russia, Mozambique and elsewhere and that’s something we need to think about because as India’s steel production increases, the need for coking coal will also continue to increase. We really need to work this out going forward.
You just mentioned Australia. India and Australia have signed a free trade agreement (FTA). How do you see this trading pact?
We congratulate the government. I think coal minister Piyush Goyal announced that it has been approved by the Australian government. I think that’s great because India and Australia have a lot of opportunities to trade together. I was there with the minister when he went to Australia in April and I knew there was enormous potential. The India-Australia trade is currently at a very low level and could definitely pick up. India buys a lot of coking coal from Australia and that is also another reason why we welcome this FTA.
Regarding the upcoming Budget, consultations and discussions have already begun. What big expectations do you or the entire sector have from the upcoming Budget?
Governments have for years lowered the cost of doing business by optimizing and I think that’s great. Basically, we’ve always looked at the cost of doing business and the ease of doing business and the government has done a great job over the years to make that better.
Fundamentally, the focus and spending on infrastructure must continue. That has a huge multiplier effect and if it goes according to plan India’s economy will continue to grow strongly.