Indian economy looking good because of focus on infrastructure, says Tata Steel MD Narendran

Tata Steel MD TV Narendran expects the second half of FY24 to be better.

The Indian economy is looking good despite global headwinds because of the focus on infrastructure, Tata Steel managing director TV Narendran has said.

“Globally there is some concern because of the fragility of some of the economies but I think the Indian economy is looking good because of the focus on infrastructure," Narendran told CNBC TV-18 on the sidelines of the Indian All India Management Association Awards.

Narendran also sort to draw a link between steel consumption and gross domestic product (GDP) growth. "Steel consumption in my view should reflect the GDP growth rate, so if the GDP is going to grow at six-and-a-half -seven percent, I expect steel consumption to grow at least that rate," the Tata Steel MD said.

He also spoke at length about Tata Steel's growth plans and how the steel-maker planned to five million tonne capacity expansion in the current financial year.

"Our growth will be dependent on the capacities that we build, we are in the middle of a five million tonne expansion, which should be completed during this financial year but we'll get the benefit of that in the next financial year," Narendran said.

While Europe continues to be a challenge for the company despite an improvement in conditions, the second half of the year should be “much better”, he said.

"Europe continues to be a bit of a challenge, things have improved because gas prices in Europe and electricity prices in India have come down and steel prices have improved so things are looking better. We have a challenge because we are realigning one of our blast furnaces in Netherlands but we expect the second half of the year to be much better," Narendran said.

Earlier this month when Tata Steel achieved its highest ever annual crude steel production in financial year 2023, however the company’s Europe operations remained muted during the March quarter. Production volumes remaind flat, while delivery volumes declined by 11.3 percent from the same period last year.