New Delhi: 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, steel secretary Aruna Sharma said on Tuesday.
Asia’s third-largest economy is notorious for making it difficult for foreign companies 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 companies.
Fluctuations in the domestic price of iron ore, which is determined by local miners, has also deterred investors.
Arun 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 companies secure land in exchange for equity or setting up joint-ventures with local firms.
“These steps will attract foreign companies to India," 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, Sharma said.
India’s mining lobby has opposed any move to limit iron ore prices, but 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 cold-rolled, grain-oriented (CRGO) steel, used in power transformers.
India imports 400,000 tonnes a year of CRGO, but that could fall next year as Germany’s Thyssenkrupp starts production from a 50,000-tonne-a-year plant being trialled in western India, Sharma said.
Top Indian steel maker JSW Steel Ltd is also keen to make CRGO steel, she added.