Tata Steel Chairman N Chandrasekaran expects the global growth this year to face stagflationary headwinds with major central banks withdrawing liquidity support and raising policy rates at a faster pace than previously anticipated.

Dwelling on macro-economic environment at Tata Steel’s 115th shareholders meeting held virtually on Tuesday, he said the year started on expectations of high growth but geopolitical tensions and trade disruptions led to rising commodity and energy prices and supply shortages globally.

The global inflation surged beyond 7.5 per cent indicating stagflationary headwinds and global growth for the current year is expected to decelerate to 2.9 per cent, he added.

Robust demand levers

While global growth is impacted, India is in a strong position and will remain the fastest-growing major economy. While there are supply-side and inflationary pressure, the demand levers across sectors continue to remain robust, he said.

The front-ended infrastructure spending by the government, including the National Infrastructure Pipeline presents huge opportunities for growth in the medium and long term. “We expect that in the coming decade, India will witness significant investment-led growth which will be steel intensive and require significant capacity growth in India. The government has been taking industry-specific policy measures to tackle inflation which we hope would be short-term measures,” he added.

Expanding capacity

The domestic steel industry is globally competitive and therefore, Indian steel companies should be able to expand capacity in value added steel products for both “make for India” and “make for the world”.

This is a defining moment in history where the steel Industry can leverage its competitive position and export its products globally to not only earn foreign exchange but also provide opportunities for capital formation in India, provide opportunities for capital formation in India, provide employment and allow Indian companies to invest in sustainable technology and create value for the long term, he said.

As part of organic growth, Tata Steel continues to accelerate its capital allocation for the 6 million tonne per annum pellet plant and 2.2 mtpa cold rolling mill complex as part of the 5 mtpa expansion at Kalinganagar. The 6-mtpa pellet plant will be commissioned by December, followed by the cold roll mill complex and the 5-mtpa expansion, which will drive cost savings and product mix enrichment, he added.

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