Mumbai: India’s two biggest private sector steel companies JSW Steel Ltd and Tata Steel Ltd are banking on their diversified product mix to take on steel giant ArcelorMittal SA as it gears up to enter the country. In October, creditors of bankrupt Essar Steel India approved a 50,000 crore joint offer by ArcelorMittal and Japan’s Nippon Steel & Sumitomo Metal for Essar Steel’s assets, paving the way for the first major foreign bets on steel manufacturing in India.

Both JSW Steel and Tata Steel, during separate meetings with media on 13 November, said the entry of the global giant in India’s fast growing steel market would be good for competition.

However, the companies said their customer relationships, array of value-added products and customisation would help them retain and grow market share and take on competition.

“Obviously from Tata Steel point of view, we will continue to up the ante," T.V. Narendran, chief executive and managing director of Tata Steel said. “We have the technology and the product lines that are required."

ArcelorMittal’s entry into India comes at a time when Indian steel demand is growing at the fastest pace in the world. India is expected to overtake the United States in steel consumption in 2019 to become the second biggest market behind China, global steel body World Steel Association said in a report last month.

ArcelorMittal plans to increase capacity of Essar Steel’s plant to 15 million tonnes from 10 million tonnes now, and produce higher grades of products. Owned by billionaire Lakshmi Mittal, ArcelorMittal is the world’s biggest steel company with a total tonnage of 97.03 million tonnes in 2017.

Analysts feel ArcelorMittal’s foray will force major Indian steelmakers to innovate, despite them downplaying the impact.

“ArcelorMittal’s entry would spur a shift from steel capacity expansion to product/technology evolution by incumbents," said domestic broking firm Edelweiss in a report.

Indian steelmakers say this is already in the works.

“Each one of us in my view has enough space," Seshagiri Rao, joint managing director of JSW Steel, said on 13 September, referring to India’s growing steel market.

Rao said in-line with global trends JSW Steel had already started to move from “volumes to value" to secure its profitability and market share in the future.

JSW Steel is spending up to 6,000 crore to expand its value-added offerings like automotive steel, electrical steel, and galvanised products by over 60% over the next three years, out of a total spend of 4,500 crore on expansions.

“We will completely transform JSW Steel...and also align the company in-line with what the market demands," he said.

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