The Hindu Business Line : Steel subsidy pact not acceptable, OECD told

A TWO-MEMBER team from the Organisation for Economic Cooperation and Development (OECD) met representatives of the steel industry here on Friday to discuss the proposed steel subsidy agreement that envisages phasing out of all State subsidies and ban on greenfield capacities.

According to a member who attended the meeting, the industry has told the OECD delegation that the terms and conditions of the draft agreement are against the interests of the Indian industry and are not acceptable until changes are made.

The OECD team will return to the headquarters after taking in the feedback from the Indian industry. Earlier on Thursday, the OECD delegation held meetings with officials in the Ministry of Steel. The OECD team comprises of Mr Wolfgang Hubner, Head of transport division, Technology and Industry, OECD, and Mr Peter Avery, Principal Administrator, OECD.

Industry representatives have pointed out their objections regarding framing of terms of the agreement and have stated that conditions for countries like India, which is in a stage of transition, would have to be different from developed countries that already have a ready infrastructure.

According to the representative of one of the associations, the practical difficulties arising out of the treaty was pointed out to the OECD officials.

As an example, for setting up a steel plant in a remote area, one has to take power from the State power supply authority.

Now if the State power corporation puts up a transformer beside the plant or as it may think necessary, should that be counted as subsidy or not.

Then there is also the issue of upstream and downstream subsidies, he said.

According to knowledgeable sources, the OECD negotiations had been facing resistance right from the beginning. India had particularly been very vocal about the rights and separate status for developing countries.

India is also working with other like-minded countries like Brazil and China to develop a pressure group at the OECD negotiations scheduled for next month.