Economy, Domestic Economy

Indian Steel Minister to Producers: Invest in Iran

Indian Steel Minister to Producers: Invest in IranIndian Steel Minister to Producers: Invest in Iran

India’s Steel Ministry on Monday asked the country’s steelmakers to “actively consider” setting up plants in Iran saying the Islamic Republic has assured to provide all assistance to them in this regard.

Senior officials of the ministry met representatives of seven steel companies, including those from public sector undertakings and told them that following the lifting of sanctions against Iran, the time is ripe to invest there. The producers were informed that the Iranian government has sought Indian investments of nearly Rs50,000 crore ($7.6 billion) in infrastructure projects, including ports, railroads and highways, Indian English-language business newspaper The Financial Express reported.

Iran has sought Indian investments in expanding its railroad network and needs about 3 million tons of steel rails to connect all major cities, industrial centers and also ports for faster transportation of manufactured goods.

The Indian government has asked State Trading Corporation to ink definitive agreements with its Iranian counterpart to pave the way for Indian steel exports there.

“The representatives of the steel companies said their respective companies are keen to invest in Iran, which is an emerging market and needs huge quantity of steel. But they emphasized on the need for raw material security along with required land should be provided to them to help them proceed,” a source said.

India’s state-run steel producer SAIL, along with STC, had bagged an export contract of 1,00,000 ton of rails to Iran Railways in October last year.

Two months later the company also proposed to set up a 2-million-ton plant at an estimated investment of nearly Rs10,000 crore ($1.5 billion).

The PSU’s proposal had come up for discussion during a meeting between steel minister Narendra Singh Tomar and Iranian envoy Gholamreza Ansari in December 2014. Allaying fears on availability of raw material resources, Ansari said that his country has iron ore reserves totaling 2.5 billion tons and is keen to explore natural resources jointly with India.

Another Indian steelmaker Essar is keen to set up a 3-million-ton steel plant. India’s state-run iron ore producer Kudremukh Iron Ore Company Limited has also planned to export about 2 million tons of pellets to Iran.

Iran is finalizing a mechanism for a credit line to cover rail exports’ transaction. The mechanism may enable its private buyers to import materials through agencies like STC.