On India as a supplier to the world both in general and in steel
TV Narendran: In general, India is a supplier of services to the world. The question is how soon can we be a supplier of manufacturing products to the world. There are some sectors which have done well. If you look at the auto component industry, it is a great example of good exports, good global organisations. Look at the chemicals industry, pharma industry, we have good examples. Steel, well, we have enough consumption growth in India to take care of what we produce. But eventually India can be a big exporter of steel as well.
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So, local demand for steel is also seeing a buoyancy. How is the industry planning and preparing to meet this demand?
TV Narendran: In FY24, steel consumption has grown at about 13%, which is good. It is the way it should be because for a growing and developing country like India, steel consumption should grow faster than the GDP growth rate, which has not been happening traditionally. But now with the focus on infrastructure and investment-led growth, we are seeing that change. The industry is adding capacity to support the growth and demand. It is a good industry for growth.
Also, how has the delays from China in terms of visa requirements as well as import of machinery been impacting the steel industry in India?
TV Narendran: Obviously, over a period of time, we would like to de-risk sourcing out of China. But all steel companies as part of growth had placed orders in China sometime back. We are dealing with these visa issues. The government is being supportive wherever required and wherever we need to get some technicians for very specialised activities.
But over a period of time, a lot of capital goods required for the steel industry will be produced in India because a lot of foreign majors are also setting up facilities in India to cater to the growing requirement for capital equipment in India.
Is this having some sort of an impact on steel inflation?
TV Narendran: Steel prices depend largely on international prices, which has been impacted by the fact that China has not recovered fully post Covid. China is exporting a lot more steel than they did ever before, apart from in 2015. In March, they exported 10 million tonnes of steel, so that means the going rate is more than 100 million tonnes a year, which is significant, so that has an impact on steel prices and which is reflected in domestic steel prices as well.When we talk about China, everyone is talking about China plus one and how India could be that plus one. But how strong do you think is India’s positioning right now to be that plus one and who are the major competitors? Which countries are the competitors for India?
TV Narendran: I think India has the opportunity. India has made good strides in that direction, but we should not be complacent. We should not assume that we will be the best place to come in for foreign investors. There are other options. Vietnam is a case in point. They worked very hard and they have done well. So, we should also work hard. I think we have been good at attracting investments thanks to the PLI and various other initiatives. But there is a lot of work that needs to be done and we should not take our eye off the ball.