By Aditya Kalra

DAVOS. Switzerland (Reuters). Tata Steel, India, is worried that New Delhi’s decision to impose a tax on exports of some steel products could cause it to reexamine its production targets if the levy continues to be in effect for a prolonged period, said its CEO on Tuesday.

India has imposed an 15% export tax on certain steel products this weekend. This comes at a moment when steelmakers want to increase their market share in Europe where supplies have been hit by the conflict with Ukraine.

India took the taxes as part of its efforts to control retail inflation that has reached eight-year records. India’s leading steelmakers organization has said that the new duty would “adversely affect” those mills which have been trying to increase exports and expand their global market share.

T. V. Narendran is the chief executive officer of India’s largest steelmaker in terms of revenue. He stated that Tata Steel understands inflationary concerns but such measures could have a longer-term impact on the steel industry.

Tata Steel is planning to double its capacity, from 20 million tonnes per annum in India to 40mtpa. But Narendran indicated that the company had assumed 10-15% would be exported.

Narendran stated that if the long-term direction is for steel exports to be dissuaded, then it’s time for us to call – after which we won’t build any more capacity than you have in our domestic market,” he said in an interview with Reuters at the World Economic Forum in Davos.

“Whether 40 million are needed or 35 millions, we’ll decide. India must encourage India exports over the long-term, he said.

Narendran said that Tata Steel would meet with government representatives as part of the industry delegations to find a “common ground” that addresses both New Delhi and the industry’s concerns.

Tata Steel also operates in Europe. It claims that it has the world’s largest producer of steel after purchasing Anglo Dutch Corus Group at 6.2 billion Pounds in 2007. However Narendran claimed India is Tata Steel’s best-performing business for profitability.

India is the best place to fulfill our growth aspirations.