NEW DELHI, 15 February 2006 — India yesterday sought to play down a brewing diplomatic row with nations opposing a $22.3-billion bid by Mittal Steel, headed by Indian businessman Lakshmi Mittal, for rival Arcelor. “India’s foreign policy is that of the country and is not linked to any one incident,” Junior External Affairs Minister Anand Sharma told reporters in New Delhi when asked about the bid.
Netherlands-based Mittal made the offer for Luxembourg-based Arcelor last month, stirring an outcry there and in France amid fears the takeover would threaten tens of thousands of jobs.
Luxembourg has said it is considering legislation to allow the boards of companies to decide on takeovers without referral to shareholders which could possibly thwart the bid. The Times of India daily yesterday then splashed on its front page that New Delhi may be considering punitive action against Luxembourg over its attempts to block the deal through legislation.
The Indian government, the paper said, “plans to review signing the proposed double taxation avoidance agreement that is currently being negotiated with Luxembourg.” The paper described the move as “an apparent tit-for-tat response to the latter’s hostility towards Mittal’s bid for Arcelor.”
However, Sharma was reassuring saying, “India takes a view in a larger global context. India has been taking independent policy decisions for which India is respected globally.”
Meanwhile, a senior EU official expressed concern about racism charges over Mittal Steel’s bid for Arcelor, which would create a steel company with an output three times bigger than its three nearest rivals combined. “It is unfortunate that allegations of racial discrimination have crept in the issue,” David O’Sullivan, European Commission Director General for trade, said in New Delhi. “The EU is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits,” O’Sullivan said, according to the Press Trust of India news agency.