CALCUTTA, 21 February 2005 — The Beijing Olympics is casting a shadow on India’s defense preparedness with communist China buying all the steel it can lay its hands on for building infrastructure for the greatest show on earth.

India’s steel exports to China has shot up 100 percent because of the construction spree ahead of the 2008 Beijing Olympics to the great delight of Steel Authority of India and other steel manufacturers.

But a close aide to Defense Minister Pranab Mukherjee said in Calcutta that China’s seemingly insatiable appetite for steel was badly delaying the commissioning of India’s first indigenous aircraft carrier called the Air Defense Ship.

Designed to carry as many as 40 fighter planes and helicopters, it will not be ready before 2012 because steel prices are shooting up thanks to demand. Steel prices have already increased two and a half times in one year. The defense official said that shortage of top grade steel and the sharp hike in steel prices have hit India’s 37,000 ton aircraft carrier under construction at the Cochin dockyards.

“The Beijing Olympics are causing such a shortage of special steel that we had to really improvise. We had to request SAIL to change the processes a bit. We played around with the carbon and tungsten content of the special steel we needed”, the official explained.

“SAIL said it could be done. It’s a bit like adding more salt or pepper to a dish. Thanks to improvisation to get around shortages and prices, the first 300 tons will be ready by April for what is described as cutting the steel - a crucial stage in shipbuilding.”

Steel prices and shortages are not the only hurdles the aircraft carrier has hit. It appears to be jinxed. Its shape and size have been changed a few times. It was initially conceived at 19,000 tons before it was first revised to 24,000 tons and finally to 37,000 tons.

India’s all-powerful Cabinet Committee on Security cleared it three times. But all that pales into insignificance before the Beijing Olympics which has dealt a mighty blow to India’s showpiece aircraft carrier.

In the past 15 months, India has gained significantly from the growth in the Chinese steel market so much so that currently about half of India’s exports of steel go to China.

Steel exports have caused the trade balance to swing in India’s favor for the first time ever. Going by Indian figures, India exported just 20,000 tons of steel in 2000 to China. This trebled to 64,000 tons in 2001. But in 2002, there was a massive jump to about 262,000 tons and even further to 709,000 tons during January-July 2003.

The big five accounting for around three-fifths of all steel exports to China are SAIL, Ispat, Tata Steel, Jindals and Essar.