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US may block lending to Indian steel industry: PTI

T V Parasuram

The US commerce department has proposed to block lending by multilateral agencies, including the World Bank, for fresh capacity addition that could lead to global overcapacity.

In a report outlining protective measures for the domestic steel industry, the commerce department said the continuous assistance and protection India and some other countries gave their steel industries could affect the world steel industry.

Complaining against Indian subsidies, the report said, "With the Government of India expected to continue assisting and protecting the steel industry, there is significant potential for India's market-distorting practices to disrupt global steel trade."

Saying that there was a need to save the American steel industry and its workers' jobs against heavy imports, the report says, "Multilateral agencies should promote economic stability and development abroad, not contribute to overcapacity that ends up hurting American industries and workers."

Analysts say it is overcapacity in some countries and not global overcapacity that should be taken into account. They feel this move could hit countries like India hard because they have to build capacity to meet the burgeoning needs of their own emerging economies.

PTI

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