Posco's pull-out from Karnataka casts shadows on India's investment climate even as the government tries hard to ease norms for foreign investment amid decelerating economic growth.
Posco had signed a memorandum of understanding with the Karanataka government in June 2010 to set up a steel plant with production capacity of six million tonnes per annum. However, land acquisition was stalled due to intense protests from farmers. Also, the mining scam that hit the state also affected the project.
The company will, however, go ahead with the much larger $12-billion (R71,270-crore) steel plant project in Orissa.