Sell 24 PSUs, ramp up output: Vedanta chairman Anil Agarwal’s answer to India’s forex stress

Vedanta chairman Anil Agarwal on Tuesday backed Prime Minister Narendra Modi’s appeal to conserve foreign exchange amid the ongoing West Asia crisis and called for large-scale privatisation to reduce India’s import dependence. 

“I fully empathise with Prime Minister Narendra Modi’s appeal to save foreign exchange in this time of crisis and uncertainty,” Agarwal said in a post on X.

He said India could not only consume less, but also “produce more” to reduce pressure on imports. “PM’s pain points are oil and gold, India’s two biggest imports, more than 30% of the total. If you add other resources from below the ground, it becomes 50%,” he said.

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Agarwal argued that India already has the geological reserves and existing assets needed to sharply raise domestic production. “Given our geology and our existing assets, we can massively increase production quickly. It has happened in past,” he said.

The Vedanta chairman called for privatisation of state-run firms and easier clearances for the mining and metals sector. “Two things are required: privatisation and self-certification in clearances,” he said.

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Agarwal said 24 public sector undertakings in the “below-the-ground sector” could be privatised to increase output. “Overall, in the below-the-ground sector, there are 24 PSUs which can be privatised and will result in a manifold increase in production,” he said.

He specifically mentioned Hindustan Zinc Ltd (HZL) and Bharat Aluminium Company Ltd (BALCO), where the government still holds stakes. “Completing the privatisation of companies like HZL (govt holds 26%) and BALCO (govt holds 49%) will also result in much more output and jobs,” he said.

Agarwal cited Vedanta’s acquisition of HZL in 2002 to argue that private ownership can boost domestic production. “When Vedanta acquired HZL in 2002, India was import-dependent for zinc. Today, we are self-reliant. With exactly the same assets,” he said.

He added that Vedanta later expanded into silver and lead production through research and development.
“We did R&D and started producing silver and lead, which no one had imagined. And now we are in the process of doing R&D to produce rare earths,” he said.

On aluminium, Agarwal said output had increased sharply over the years. “In aluminium, output was 1 lakh tonne, and now we are in the process of producing 60 lakh tonnes,” he said.

Agarwal said India can significantly reduce imports of key commodities using existing assets. He said he was 100% confident that India can produce enough resources domestically with existing assets (new assets take longer) to mostly take away imports.

He also urged the government to place greater trust in private companies. “Government should trust the private sector to entirely eliminate any vulnerability on account of imports of oil, gold, silver, copper, fertiliser, and many other resources. We will deliver for India,” he said.

On Sunday, Modi urged citizens to reduce fuel consumption, postpone gold purchases and foreign travel, and adopt work-from-home practices to help conserve foreign exchange amid rising global energy prices linked to the West Asia conflict.