IBEF: November 11, 2019
As per the Deloitte official, India's move to allow 100 per cent foreign direct investment (FDI) in coal mining is positive one. It is also a good policy enabler towards the country's long-term goal of producing 300 million tonnes of steel per annum.
"I think it is a positive move on the part of the government. The global macro-economic environment is softening, and it is a step in the right direction," Mr. Andrew Swart, Global leader, Mining & Metal, Deloitte said.
The Government of India had allowed 100 per cent foreign investment in coal mining and contract manufacturing in August 2019.
"You get a real opportunity to bring in technical skills in the exploitation of these particular deposits and that's where a lot of international players can add a lot of value to the sector," Swart added.
He also said that, in the area of technology transfer, there is an opportunity to partner with some of global miners. He further added that, particularly, in the area of digitisation, it would be an important step in improving the competitiveness of India’s mining sector.
Digitisation in mining sector is an important productivity driver along with the key advances in automation and analytics which is transforming mining, he said. It will be crucial for India to adopt these technologies which will also enable the creation of new skills and new sources of value to communities, Swart added.
"At the end of the day, India has a significant base of resources which make it a very attractive place for global mining companies to invest," he noted. He further added, "There is lot of global uncertainty around the trade and that is weighing on consumer confidence all around the world. There are a lot of stable geographies such as India which has got large resources which are yet to be exploited. There are many global companies which are looking for opportunities as they look for security of supplies".
When asked, in coal mining whether the FDI will help in boosting the efficiencies of domestic coal companies, he replied, any foreign investment will perform couple of key things, including raising the level of competition.
"Foreign investment brings in new technologies, which bring in new techniques, new mindset. And I think that raises the overall competitiveness of industries. So foreign direct investment has a positive effect on the industry. That's why this move on the part of the government is really a step in the right direction," he further said.
National Steel Policy 2017, which was earlier approved by Cabinet, envisages the investment of Rs 10 lakh crore (US$ 143.08 billion) to take capacity to 300 million tonnes by 2030-31.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.