Hyundai, South Korea’s automotive giant, has a surprising secret: its Indian-made cars don’t use Indian steel. Instead, the company imports steel from South Korea through a related entity, bypassing India’s domestic steel industry.
As a Korean Chaebol, Hyundai’s diversified businesses are crucial to the Korean government. Beyond cars, Hyundai produces battle tanks, ships, petrochemicals, plastics, semiconductors and more. Its steel-making unit, Hyundai Steel, has a global production capacity of 30 million tonnes per annum, surpassing India’s largest steelmaker, JSW.
Here’s how the system works:
1. Hyundai Steel’s Sriperumbudur unit imports hot-rolled coils from Korea under the India-South Korea Free Trade Agreement.
2. The steel is processed and supplied to Hyundai’s two Tamil Nadu manufacturing plants and Kia’s Andhra Pradesh plant.
3. Hyundai is expanding its steel operations with a new STEEL SERVICE CENTRE in Pune, near its acquired General Motors plant.
This arrangement has sparked controversy, with Union Minister Piyush Goyal criticizing Hyundai and Kia for allegedly stripping India of billions in foreign exchange and economic value. The company’s reliance on imported steel raises questions about its commitment to India’s “Make in India” initiative.
Marex Media