Tata Steel says India export tax could alter output targets

div classBodysc17zpet90 cdBBJodivpBy Aditya Kalrap

pDAVOS, Switzerland Reuters – India‘s Tata Steel is concerned New Delhi’s sudden decision to impose an export tax on some steel products could force it to review its production targets, if the levy remains in place for a long time, its CEO told Reuters on Tuesday.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pIndia imposed an export tax of 15 on some steel products over the weekend, at a time steelmakers are looking to make up for tepid local demand by increasing market share in Europe, where the Ukraine conflict has hit supplies.p

pThe taxes were part of a series of measures India has taken to rein in retail inflation, which has hit eightyear highs. But Indias top steelmakers body has warned the new duty will “adversely impact” mills that have been aiming to boost exports and widen global market share.p

pT. V. Narendran, chief executive of Indias biggest steelmaker by revenue, said that while Tata Steel understood the inflationary concerns, such measures can hit the steel industry over the longer term.p

pTata Steel has plans to double its capacity from around 20 million tonnes per annum mtpa to 40 mtpa in India, but Narendran said it had baked in an assumption that 1015 of that would be exported. p

p“If there is a longterm direction that exports of steel will be discouraged, then well have to take a call – then you will only build as much capacity as you need for the domestic market,” Narendran told Reuters in an interview at the World Economic Forum in the Swiss Alpine resort of Davos.p

p“Whether we need to be at 40 million or 35 million, we will decide … In the mediumtolong term, India should encourage exports,” he added.p

pAs part of industry delegations, Tata Steel will hold talks with the government to “find a common ground” which addresses New Delhis concerns as well as the industrys, Narendran added.p

pTata Steel also has operations in Europe, where it says it is one of the largest steel producers after buying AngloDutch Corus Group for 6.2 billion pounds in 2007, but Narendran said India was its best performing business in terms of profitability.p

p“Our growth ambitions will be fulfilled best in India.” p

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pp Reporting by Aditya Kalra in Davos Additional reporting by Neha Arora Editing by Alexander Smithp

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