Indian Steel Producers At A Disadvantage In Comparison To Chinese Steel Producers: JSW Group

So just coming before coming here, I heard this comment and I said Uday is not in manufacturing, so he can comment freely. If he was in manufacturing, then he would say this. So I was saying, you know, we are not yet the factory of the world. Let's first become the factory of the world and then we should open up our doors for competition. Let there be no... Nothing. I mean, the United States, even after let's say 100 years or 150 years of developed nation status, even today they have tariffs. Europe is putting tariffs, right? And we are saying we should open up? Then we will kill our manufacturing here. We are not a great manufacturing country in any case today. Our GDP manufacturing GDP is only 17% of our GDP, right? And we must get to 25-30%, what China is. But if you open up and we become liberal, then we will kill our industry.

What Donald Trump is, in my opinion, he is very clear. He is very clear-headed guy, whether right or wrong, but he has a clarity of thought. And he says that for me, America is first. I want to build America. I don't care about the world. For me, America is the world. And therefore, I want my industry to grow. I want America to grow, American industry to produce goods. It's not that Chinese should supply to me and then I will consume. I don't want to become only a consuming country. I want to produce and consume. So therefore, I want to put tariffs. Yes, tariffs do make you, let's say, a lethargic. Let's say it becomes, you become more uncompetitive to an extent. So therefore, you have to gradually bring down the tariff to become comparatively... start running the race.

Not at all. Not at all. It's a teenager? Pre-teen. Pre-teen. Yeah, we are just kind of four or five years old, really. Yeah, absolutely. In manufacturing, yeah. Because, because you see China, if you open up the records and see China in 1990, what kind of protectionist China was? In 2000, what were their protection levels? And what they are today? Today they are open up because they became the factory of the world. I wanted to export steel in 98-99 to China. Was not permitted to do that because China had tariffs. They removed the tariff. But now today, we have zero tariff on steel. Chinese steel, which is surplus, they are near 60% of their capacity surplus capacity. So it comes via Japan, Korea, Vietnam, Malaysia to India at 0% duty.

I am not saying higher tariffs, but there has to be, the government must have a very clear view of what they want. The heavy industries to come up in this country. Because steel industry, for example, I am just taking steel as an example because I belong to steel industry. If you don't want the heavy industries to come in India, you want to rely on Chinese steel industry to build Indian ecosystem, Indian SMEs and MSMEs, I have no problem. I can go somewhere else and invest. I don't have to invest here. But I love this country. I would love to invest here. I have grown here. I have earned my bucks here, right? So I would love to invest here. But this thought that MSME and SME is more important than the heavy industry, if the heavy industry doesn't do, MSME, SME doesn't... So you have to...

Not really. I mean, yeah, but this fact is you have to, because steel industry needs huge investment, right? So for making huge investment, you have to make profits. If you can't make profit, then you can, my shareholders will not give me money to invest, right? So then I can't build more industry. Today, for example, India needs 20 million tons of steel every year. China needed, let's say, in year 2000. We need it today. So 20 million means 20 billion dollars of investment every year. I don't think if any other industry requires that kind of investment. We are willing to do that as an industry. But there are only, in every country, there are only four or five players which invest in any industry, right? So a 20 billion dollars among four or five players is a huge investment, yeah, which we are doing. But if we don't make money, we can't invest. Okay.

Personally, no. As I said, I love India. I love to expand in this country. And this is my karma bhoomi. So I would do here. But I want the right policy. I want the country must really think about how to develop the heavy industry.

For example, we cannot be a country that exports minerals and imports finished products. We cannot be there. So there has to be a complete... No, no. I have been advocating this policy for a long time, more than 20 years. Please don't export minerals. Please allow Indian industry to consume the minerals, add value, and export the products, right? But we are exporting minerals and importing finished products. This is a complete no-no. Number one. Okay. Number two, there has to be a level playing field, right? A country like China, which has huge surplus, near 500 million tons. We consume 150 million tons of steel. China exports near 150 million tons of steel. So therefore, there is no way that we can compete with China. I mean, it's not that we are not comparatively... In a normal year, then the Chinese steel companies do. But the Chinese are all state-owned companies, yeah. And for them, profit is not very important. It's more like a job creation, it's ego boosting thing that every province has a steel plant. That province has bigger capacity than the other, you know, that kind of thing. They have competition, healthy competition. But therefore, they don't care for the profits. But we don't make profits, then we don't have a state exchequer writing checks for us. Then you don't get money. Yeah.

No, absolutely. With any country, in fact, even Pakistan, for that matter, we should be pragmatic. To deal with Pakistan, we should be pragmatic. Yeah, we should not say that no, no, no, no, nothing doing. So when I said we should not do business with China, when Galwan happened, because I was very clear that we cannot deal with an enemy state. Pakistan, for that matter, is an enemy state, yeah. But still, if we work properly, you know, over with a control mechanism, we should open up and do business. Because Pakistan, even with Pakistan, because a very poor neighbor will always hurt us. So therefore, we should think, we should have a long term. But this is not a foreign policy discussion we are having. But my point is that with China, we should, because China has already developed this technology on electric vehicles. Today, 60% of their new car sales are electric and new energy. India, we have 0%. And this is the way forward. We import all our fuel for the cars. All petroleum products are imported, 85-90% is imported. So it's in our interest that we transition ourselves to a technology which is domestic, which is local technology. So bring the technology in from China, but manufacture in India.

Because technology exists in China. We must develop it over time in India. But we must bring the technology and develop the products in India.

So the idea is to give the consumers a very good product, very good quality at an affordable price in the EV spectrum. And I believe that JSW can do it extremely well. Okay. So that's... you're giving us, Mr. Jindal. But you know, on manufacturing, the big Make in India moment, you rightly pointed out, is still about 16% share of GDP. When do we get to that 25% which has been the target and the aspiration? How do we get from pre-teen to teen to adulthood?

I mean, it's a matter of time. We were discussing recently that India is not spending enough money on innovation, on R&D. Indian industry is not spending enough money. The government is trying to help and trying to nudge the industry to invest more in R&D. But we are not doing it. Because as they say, if you are hungry, first you would like to eat, and then you want to do puja, and then you want to worship, and then you want to do something. So right now, the industry, I think, is still growing, investing in the growth, and then it will go into the R&D. Because it's the most important thing. Somebody was asking me why we can't have an NVIDIA from India, why we can't have Microsoft from India. But the point is that because we are not spending enough in R&D, we don't have enough money. It's a capital problem. It's a capital problem. It's a mindset problem. Because you know, the mindset, once you are investing, you have a limited amount of cash available. Either you invest in expansion, which is needed for the nation, for the country's requirement, or you invest in your R&D and your growth and your technology. So you feel that expansion is giving you better ROI. And a straightforward answer in the boardrooms is let's go for expansion. Because if you invest in R&D, whether that would be successful or not, we don't know. And there are so many people investing in China, in the US. And so you prefer to buy the technology as opposed to investing in it yourself. As of now.

Yes, it's not very easy. But demand... So we have made a very ballpark number that between now and 2030, 2031 fiscal, we would be investing close to 70 billion dollars in India and maybe 2 billion dollars outside India. 70 billion in India, 2 billion outside of India.

I'm not sure about it. Not for the moment. Not for the moment.

Not yet. No, no, nothing at the moment. The plate is full, more than full, more than full.