Exporting iron ore is bad for country, says Jindal

JSW Steel MD Sajjan Jindal tells FE:

I think Indian decision-makers need to take a far-sighted view on this issue. In today’s cut-throat competitive world, while every nation is trying to play off its strength in order to remain competitive and survive, we are literally obliterating our strategic advantage by exporting our iron ore. In fact, in 2005-06, we exported almost 90 mt of our 165 mt iron ore production. Many in the mining fraternity believe India has abundant reserves—enough to last for hundreds of years. What they don’t understand is that India’s per capita iron ore availability is one of the lowest in the world at only 21 tonne per person.

Suppose the demand for steel picks up in overseas market, and domestic customers are not willing to pay enough I wonder if steel makers will still make 'strategic advantage' argument and ask the government to ban steel exports.

Anyway, case after case shows that the best way for a country to gain and sustain 'strategic advantage' is to simply let businessmen decide where they source money, material, machines and mangers from and to whom they sell their products/services. Even with this freedom to choose, high transaction costs would mean that businessmen often have to act sub-optimally. I dont know if there is any point in government adding to those costs (by tariffs, immigration restrictions etc). But, governments do that all the time - sometimes in the name of protecting domestic business, and sometimes in the name of national security.

Two examples from today's BS
After a delay of four months, Indian intelligence agencies have given security clearance to International Container Terminal Services Inc (ICTSI) of the Philippines for participating in the Rs 1,200-crore offshore container terminal project at Mumbai Port Trust (MbPT).

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Telecom firms that have non-Indian CEOs or CFOs may get to keep them, as the Department of Telecommunications (DoT) is understood to have convinced security agencies that such foreign executives were no threat to the country.

DoT, which held extensive discussions with security agencies in this regard, had also possibly found a practical solution to allowing companies remote access to haul telecom traffic from outside India, sources said.