Steeling a march
There has been much confusion over, not to mention theories about, L.N. Mittal's bid to take over steel giant Arcelor. One thing is certain though: the colour of Lakshmi Niwas Mittal's skin will not determine whether Arcelor will fall into his lap or not. This is the message that the Indian government has sent out loud and clear to the Grand Duchy of Luxembourg. By telling the Prime Minister of Luxembourg that India will not renew the double taxation treaty with the country, Commerce Minister Kamal Nath has made India's position very clear. New Delhi's move also symbolises India's new confidence about its place among the comity of nations.
Protectionism of any kind anywhere is rightly viewed with suspicion these days. Arcelor's protectionist reaction appears to be more pronounced because of Mr Mittal's nationality. But here's the bottomline: Mr Mittal, an Indian passport holder and a resident of Britain, heads a global conglomerate with plants across the world. His astute turnaround skills have seen him revitalise ailing steel plants in places that include Mexico, Kazakhstan and Poland. At the end of the day, Mr Mittal is a businessman who is acquiring mass because he believes that consolidation is the best way forward. Prima facie, it seems that the European Union is indulging in protectionism to keep him at bay. By his reckoning, though, Arcelor's shareholders have understood the import of the benefits of the takeover. Against this backdrop, what is interesting is that the Indian government is actively supporting the steel magnate in this endeavour. With trade talks poised delicately, India has found in Mr Mittal a vanguard who could possibly be used to batter the double standards of the EU.
So the issue is not about Mr Mittal's nationality or about his place of residence or about any differences in 'corporate culture', but about the EU's claim to champion a free trade regime. The hypocrisy of the developed world with regard to agricultural subsidies is well known, as is its tendency to use non-tariff barriers to keep out developing country products. What the Mittal episode brings out is that the Europeans will not hesitate to clutch at other straws to protect their businesses. Having entered into the arena of globalisation, it is in India's interest to expose double standards wherever and whenever they are applied.