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Ambarish Mukherjee

New Delhi , June 23

SINOSTEEL Corporation, one of the largest steel trading firms owned by the Chinese Government, has finalised plans to set up a wholly owned subsidiary in India to undertake wholesale trading in metallurgical raw and processed materials.

The company has recently applied to the Foreign Investment Promotion Board (FIPB) to set up a wholly owned subsidiary with an initial investment of Rs 4 crore to undertake trading activities. However, the board is yet to approve the proposal and is currently awaiting a clearance from the Ministry of External Affairs.

The company's primary focus would be to trade in iron ore and metallurgical coke, sources said. According to the plan, the mother company Sinosteel Corporation of China would be holding a 99 per cent stake in the Indian entity, while the remaining 1 per cent would be held by its Hong Kong-based subsidiary Sinosteel International Ltd.

According to the company's application filed with the FIPB, the company plans to undertake export, import and cash-and-carry wholesale trading of metallurgical raw and processed materials, auxiliary materials, metallic and non-metallic mineral products, non-ferrous and ferrous metal products and other items, the officials said. Sinosteel's proposal was taken up twice by the FIPB in May and was deferred at the behest of the External Affairs Ministry. It was again taken up by the board earlier this month and was put on hold, as the Ministry is still examining it (all foreign direct investment/FDI proposals from China require a mandatory clearance from the Ministry). However, the proposal has already received the green signal from the Ministry of Steel and the Ministry of Mines, the officials said.

Sinosteel Corporation was established in 1993. The company is the raw materials supplier and sales agent for major Chinese steel mills with which Sinosteel has entered into long-term strategic partnerships. The company has around 30 logistic points in major cities and ports of China. It also has presence in 14 overseas locations, including Australia, South Africa, Brazil, India and Hong Kong.

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