‘Without tariffs, we will be a dumping ground’

Sajjan Jindal, chairman and managing director, JSW Group, is on an expansion spree and is lining up investments of Rs 5.8 lakh crore for next six years ($70 billion)…to build renewables, steel, apart from forays into cement, infrastructure and automobiles. In an interview to TOI, Jindal makes no bones about protecting domestic industry, arguing that China is dumping steel through countries with which India has FTAs. His demand goes beyond steel to pharma, furniture, textiles and tyres. Excerpts :
Donald Trump is talking tariffs to protect US manufacturing industry, and the same is being done by many in Europe. Where are we heading and what about globalisation?
The Western world has been very smart. When they were industrially strong and could export products across the world, they created organisations like GATT and WTO, from where they spoke against tariffs and advocated free trade and efficiency. But then China started to grow and emerged as a factory to the world. China built massive capacities and its production costs came down dramatically as it started to export. Today, a majority of things sold in the US are Chinese. Suddenly, the Western world is realising that it’s getting stuck. So, Trump says that I want to make America great and thus I will put tariffs. This whole WTO concept is getting dismantled… If they don’t do it, their industry is going to shut down because over the years their cost of manufacturing has gone through the roof. There is no way they can compete. Everybody is threatened and feel that if they don’t put tariffs, then their industry is going to shut down.
What will be the impact of tariffs on economies like India where we say, ‘Make in India for India, and for the world’?
Indian govt is aware that the whole world is putting tariffs. Unless we put tariffs, we will become a dumping ground, especially for the Chinese. All their surplus products will come to India.
Which sectors in India require protection?
It will be almost anything and everything, right from steel, petrochemicals, and textiles to lights, furniture, tyres, carbon black. China is much, much lower in costs than us.

How do you see manufacturing in India vis-a-vis China?
In China, the share of manufacturing in the economy is 35%. We are at around 15%. China has a massive scale. There is a big gap between us and China. China has a 15 or 20 years lead over India. So, we must raise our bar and really work on it. China has a very organised way of doing things because it’s a jobs-driven, top-down economy. India is a bottom-up economy. While industries in China are provided infrastructural ecosystem from the state, including 50% salaries for the staff till they become profitable, we don’t have it here. The ecosystem is not there. So, naturally our cost of production goes up.
How is China dumping steel in India?
The fundamental issue is that in China, industry is an employment vehicle. It is not a vehicle to make profits or to grow through its own means. Their industry gets so much support from the State, whether it’s through subsidised power, subsidised rail freight, subsidised loans… It’s almost like a national project for China to keep their people employed. That’s what we’re up against. China is selling steel to Japan, Korea, and Vietnam, which have FTAs with India. Steel is being dumped into India from all these countries. So, Chinese steel is just circumventing and coming into India.
By asking tariffs, isn’t the Indian industry being protectionist, instead of competing with global players?
This is a relative term. Protectionism on a pure basis is not good because it inbreeds inefficiency. But competing with the highly-subsidised Chinese steel would mean we will not make money. If we don’t make money, we cannot have surpluses to reinvest in the expansion. So, we need protection till the time we become mature. This may be needed, maybe for the next five to 10 years.
You have outlined an aggressive investment plan of $70 billion by FY31. Where are you investing it?
We plan to invest $30 billion in renewable energy, battery storage, battery manufacturing and cell manufacturing. We intend to scale up new energy to 50,000 MW. Steel is the other big one, where we are raising our capacity from 28 million tonnes to 50 million tonnes, and this will need $25 billion. Another $15 billion will be spent in cement, auto, infra businesses.