Korean steelmaker unlikely to shell out big bucks in India
The Indian government keeps asking Korea’s leading steelmaker POSCO to build an integrated steel plant there. In response, POSCO executives recently met with Indian officials.
POSCO claims that it has yet to decide on the specifics. But the powerhouse fails to clearly say that it will never try to build an integrated plant in India again.
This prompts some to expect that POSCO may make a big investment in India. A Korean media outlet even reported that after checking out the viability of the idea, POSCO will firm up a plan in three months along with the Indian government.
However, watchers point out that POSCO would not shell out big bucks in the world’s second-largest steel market because of past failure.
“After its long struggle with the Odisha project, POSCO appears to invest in only downstream units in India, not in integrated mills,” said a source who works in the steel industry.
In 2005, POSCO signed a memorandum of understanding with the Odisha government to set up a 12-million ton steel plant in the eastern Indian state.
Back then, the $12 billion project was hailed as the biggest foreign direct investment into India.
Twelve years later, however, public resistance and regulatory hurdles prodded the Korean company to eventually drop the plan.
“The meeting between POSCO executives and Indian officials was just a courtesy call,” a POSCO representative said. “The report is not true that we will make any plan in three months with the Indian government.”
But India keeps requesting that POSCO set up a greenfield steel plant via establishing a joint venture with Rashtriya Ispat Nigam (RINL), spearheaded by its Prime Minister Narendra Modi.
On the sidelines of the G20 meeting in Osaka late last month, Modi met with his Korean counterpart Moon Jae-in to call for Korea’s investment in India in the steel industry.
POSCO was not on the lips of the Prime Minister but President Moon would have known what he meant.
“It is always special to meet my good friend, President Moon Jae-in, He is extremely passionate about furthering friendship between India and the Republic of Korea,” Modi tweeted after his meeting with Moon.
“Today, we talked about various steps to enhance trade, economic and people-to-people relations.”