Centre to woo foreign steel firms

New Delhi, May 9: India is drafting a land-for-assets policy among a raft of measures aimed at attracting foreign investment into the world’s third largest steel producing market, the steel secretary said on Tuesday.

Asia’s third-largest economy is notorious for making it difficult for foreign firms such as POSCO to buy land, losing out on billions of dollars of investments in key sectors such as steel and preventing the transfer of technology to local firms.

Fluctuations in the domestic price of iron ore, which is determined by local miners, has also deterred investors.

Steel secretary Aruna Sharma told Reuters her department was preparing several policies aimed at boosting investor confidence after Prime Minister Narendra Modi last week approved a plan to nearly triple domestic steel capacity and raise consumption manifold by 2030.

The government will soon issue detailed guidelines on the mandatory use of locally made steel in big government projects, and use international benchmarks to prevent companies from jacking up prices through cartels, she added.

The government will also help firms secure land in exchange for equity or setting up joint-ventures with local firms.

“These steps will attract foreign companies to India,” Ms Sharma said.

“We are also working on a policy to make it easier for companies to transfer land to foreign companies so that they can set up plants without having to worry about approvals.”

The steel ministry has already asked its subsidiary miner NMDC Ltd to consider reviewing iron ore prices only once in three months instead of regular revisions so that prices do not swing, Ms Sharma said.

India’s mining lobby has opposed any move to limit iron ore prices, but Mr Sharma said the government would not put a cap on prices.

Even though India is a major steel producer, it depends heavily on imports of expensive high-grade alloys used in cars and electrical equipment from countries including Japan, South Korea and Russia.

One such product is coldrolled, grain-oriented (CRGO) steel, used in power transformers.

India imports 4,00,000 tonnes a year of CRGO, but that could fall next year as Thyssenkrupp starts production from a 50,000-tonne-a-year plant being trialled in western India, Ms Sharma said.