Iron Ore, Steel and Machinary

Recently there was a debat in Economic Times (ET). (Well, It was hardly a debate, as Economic Times did not publish other view of the story..)...

As per ET, India's Balance of Payment (BoP) with China is favourable to India, because of High Iron Ore export to China. And ET Editor is against reduction in Iron Ore Export or any restriction against it.

Now this baffles me completely.

Let's try to understand it. In time of British rule, The Britishers exported raw material from India to UK, and then processed it, and then imported finished goods. This policy of british made Indian artisans poorer and made raw material very costly. It also made Indians buy costlier foreign-made finished goods. (This is where Khadi Movement started.....)

What we are seeing is something very similar now. India exports Iron Ore to Japan and China (largest consumers of Indian Iron Ore), they make steet and machinary using Iron Ore. India imports steel and machinary from them. In effect we lose out by exporting cheap Iron Ore and importing costly machines.

No doubt, that we need better technology from developed nations. But that has to stop at a certain level and we should start making local technology. If we keep exporting Cheap Iron Ore (and there by making Iron Ore costly for Indian Steel Manufacturers and thereby making steel costly in India), and importing Costly Steels, when will we generate jobs for Indians by setting up steel plants and machine plants?