NEW DELHI (Reuters) - India’s ambition to become a major steel exporter could be disrupted by U.S. import curbs, Steel Minister Chaudhary Birender Singh said, underscoring the need for free trade.
“Our exports have increased substantially, about 40 percent growth during January to December (2017),” Singh told Reuters in an interview on Tuesday.
“What I foresee is that our exports are going to grow. In that case, these kind of disturbances should not take place.”
Last week, U.S. President Donald Trump set import tariffs of 25 percent on steel and 10 percent on aluminum, to come into force in 15 days, a disputed move that threatens to spiral into a trade war.
India’s stance, Singh said, will be to call for unrestricted trade and watch for responses from other steel-producing countries.
“We can’t remain in isolation,” he said, adding it had similar interests to those of other steel-producing countries.
“We are not exactly in wait and watch mode but the pace and intention of the other steel producing countries should also be watched closely.”
According to a Feb. 22 note prepared by the steel ministry, India expects a loss of $130 million due to the U.S. import tariffs, which accounts for just 5 percent of the country’s total steel exports.
India was already expecting a 6 percent fall in exports to the United States for 2017/18, to 333,656 tonnes, it said.
Trade tensions are threatening what is the best global economic growth outlook in seven years, the OECD said on Tuesday.
India’s much-delayed $1 billion joint venture between ArcelorMittal (MT.AS) and state-owned Steel Authority of India Ltd (SAIL.NS) to produce automotive steel may finally be signed by March-end, Singh said.
SAIL and ArcelorMittal signed a preliminary understanding in 2015 to jointly produce 1.2 million tonnes of automotive steel a year, but disagreements over commercial terms have delayed the venture that would give the Luxembourg-based company a foothold in the world’s fastest-growing steel market.
SAIL was also in talks with Canada’s Teck Resources Ltd (TECKb.TO), the largest North American producer of coking coal used to make steel, for long-term purchase agreements, Singh said.
South Korean steel major POSCO (005490.KS), meanwhile, has been in talks with Indian mills about joint venture opportunities, he said.
“They (POSCO) approached us about six months ago to have a discussion on certain collaborations,” Singh said, adding that a project with POSCO might take off within two years without giving more details.
Singh said India was pushing foreign companies to set up plants in India to benefit from a procurement policy that gives preference to local mills, as the country needed to do more to make high-end steel products.
“High-end steel production is the major area of our concern,” he said.
Reporting by Neha Dasgupta; Editing by Malini Menon/Jason Neely/Susan Fenton