Financial Daily from THE HINDU group of publications
Thursday, Mar 07, 2002
Financial Daily from THE HINDU group of publications Thursday, Mar 07, 2002 |
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Corporate
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Interview Industry & Economy - Steel `Meagre exports insulate Indian steel from US move' Shyam G. Menon
Dr. J.J. Irani
MUMBAI, March 6 DR Jamshed J. Irani, Director, Tata Sons Ltd, and until the middle of last year Managing Director of Tata Steel, is a name closely associated with the country's steel industry. Then, who better to ask on what the additional tariff on steel imports to the US could mean for India's steel manufacturers. Excerpts from Business Line's interview with Dr Irani. How significant is the US as a market for the global steel industry and Indian steel makers in particular? The US is the largest user of steel in the world. It imports approximately 30-35 million tonnes of steel every year and is by far the largest importer of steel in the world. India exported a maximum of one million tonnes to the US in any given year. What is your assessment of the immediate impact of the US decision on Indian steel exports? Given the current situation in the global steel industry, what could be the larger fallout of the decision on the sector as a whole? The export of Indian steel to the US was `nil' for the past one year because of anti-dumping duties. Therefore, the addition of 30 per cent, if applicable to Indian steel also, will not have any impact. These comments apply to hot rolled coils only. Obviously, other major exporting countries to the US, such as the EU, Japan, Australia and the CIS countries, will be greatly hit. Their exports to the US will be replaced by internal production in the US. Such countries would naturally seek other markets to export their product. Do you consider the US move, done in the name of "restructuring", a fair step — fair to the global steel industry and the WTO regulations governing international trade? The US action is totally contrary to WTO norms, and most of the affected countries will take recourse by applying to the organisation. It is a very protective step towards the US' rather high-cost steel-making operations. Though applicable for only three years, do you see the new tariffs being restricted to such a timeframe? Or, is the magnitude of restructuring required in the US steel sector likely to take more time? History has shown that whenever the US took similar steps, they have been largely ineffective in restructuring the US industry. Time and again, the US Government has come to the rescue of US steel only to see it going sick in another few years. Do you fear that Europe's retaliation may not be US-specific, but could hurt exporters like India too? Europe will obviously retaliate, as they have already stated to do. India's exports to Europe are negligible and as such, Europe's retaliation would not have any impact on the already meagre exports from India. What are the alternatives for Indian steel exporters? Are they easily accessible in today's tough market scenario? India will have to try harder to export to its immediate neighbours including South-East Asia, which was a good market till about three years ago. And, of course, to African countries.
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