The government will push for a higher subsidy of 5-10% of turnover of domestic steel companies and scrapping of limits on capacity expansion in its new draft proposal for international steel agreement proposed by the Organisation for Economic Cooperation and Development (OECD).
The new set of liberal proposals was being finetuned and would be submitted to the grouping of developed countries soon.
OECD is in the process of arriving at a multilateral consensus leading to signing of an international steel agreement. To be incorporated in WTO negotiations at a later stage, the agreement is an effort by the developed countries to discipline the global steel business that is marred by inconsistencies.
Proposals are in line with the thinking that unlike in the developed countries, steel capacities in developing countries were still low, requiring further expansion before a cap is prescribed. For instance, India produces just 36 million tonne, just a fraction of the global steel output of 1,050 million tonne.
On the subsidy issue, the steel ministry was planning to ask OECD not to recommend a cap. Alternately, India may agree for a higher limit of 5-10% of total turnover of a steel company as subsidy..
