Why do Indian steel firms look for foreign shores, asks PM

Preference for foreign soil over India for investment in the steel sector coupled with domestic steel companies' increasing plans to invest in foreign shores, have led Prime Minister Manmohan Singh to call for deep introspection.

In his address at the foundation stone laying ceremony for expansion at IISCO Steel Plant (ISP) of Steel Authority of India Ltd (SAIL), at Burnpur in West Bengal, Manmohan Singh wondered whether the reasons could be industrial environment or red tapism which forces entrepreneurs to shun domestic opportunities.

Singh's comment assumes significance since steel projects in many of the states were held up for want of clarity on iron ore allocation or land.

Arcelor-Mittal's project in Jharkhand had not made much headway due to the tussle over iron ore mines, more specifically over the SAIL-owned Chiria mines, the largest iron ore belt in Asia.

Tata Steel's greenfield project in Jharkhand was also hanging fire, since the rehabilitation and resettlement package had not been approved by the Madhu Koda government. And so were many other projects.

Singh cited examples of Lakshmi Mittal and Ratan Tata and said, "Lakshmi Mittal started his business career in West Bengal. Today his group is the world's largest steel producer without producing a kg of steel in India. Why is it that so many Indians do so well when their enterprise and creativity is allowed to blossom? Why is it that they choose foreign shores for growth and expansion rather than their own turf," said Singh.

The prime minister also mentioned Ratan Tata, who is currently in the middle of a bidding war for the Anglo Dutch steelmaker, Corus Group.

He said, "Why does Lakshmi Mittal or Ratan Tata have to buy foreign companies to establish global presence and expand steel capacities when our per capita consumption of steel is so low and there is so much opportunity here. We need to introspect on this deeply."