India looks to protect its steel industry
India may soon mandate the use of local steel in government infrastructure projects worth billions of dollars, sources said, pitching it as a World Trade Organisation (WTO)-compliant protectionist measure aimed at further cutting cheap imports, mainly from China.
The government expects the move to boost sales of local companies, such as JSW Steel and Tata Steel, and eventually attract global steelmakers, such as ArcelorMittal and POSCO to invest in the country.
India, the world’s third largest steel consumer, has budgeted a record US$59 billion (RM 262.4 billion) for steel-intensive infrastructure projects, such as ports, roads, railways and power.
“The preference in procurement will enhance demand, and thus production,” said Steel Minister Chaudhary Birender Singh.
“It is preference with no compromise on quality and competitive pricing. To use domestic produce is an acceptable norm.”
Analysts said a similar proposal by United States President Donald Trump requiring the use of domestic steel to build two energy pipeline projects could violate international trade laws, but Indian officials say their plan will fall within WTO rules.
A government document on the proposal cites an article under the General Agreement on Tariffs and Trade of the WTO, allowing an exception to “procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale”.
Workers at the construction site of the Bhendi Bazaar redevelopment project in Mumbai, India. The country has budgeted US$59 billion for infrastructure projects.