Indian Steelmakers Miss Investment Target Amid China-linked Delays
Indian steelmakers have fallen short of their investment target for the fiscal year ending March 2024, attributed to delays in importing machinery from China and obtaining visas for Chinese experts, according to a government document and reports.
Despite committing to invest 210 billion rupees (USD 2.52 billion) under a production-linked incentive program launched in 2020, major steel producers like JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel managed to invest only 150 billion rupees, as per reports.
The delay in capacity expansion comes as domestic steel demand remains robust, underscoring the urgency for timely investments. Steel companies have encountered challenges in importing machinery from China and securing visa clearances for Chinese experts for over six months.
According to insiders, some steel mills that successfully acquired equipment faced setbacks in bringing in Chinese experts to work on new projects. The Indian government's guidelines to streamline visa clearances for Chinese engineers aim to alleviate this bottleneck.
The strained bilateral relationship between China and India, exacerbated by border clashes in 2020 and subsequent skirmishes, has added complexity to business transactions between the two nations.
Despite geopolitical tensions, India is experiencing a surge in economic activity and infrastructure development, prompting steelmakers to enhance capacity and capitalise on rising demand. This strategic move aligns with the Indian government's emphasis on bolstering the production of high-end specialty steel and value-added steel products for critical sectors such as defence, space, automotive, and power generation.
As steelmakers navigate geopolitical challenges and strive to meet investment targets, their ability to overcome logistical hurdles will be crucial in realising India's ambitions for a robust and resilient steel industry.
