ArcelorMittal and Steel Authority of India Ltd (SAIL) have agreed to a proposal to export a fifth of the auto-grade steel they aim to make under a planned $913 million joint venture, according to a document obtained by Reuters.
The proposal is one of several made by Indian government think-tank NITI Aayog, which is mediating talks on commercial terms for the delayed venture that will give ArcelorMittal a foothold in the world's fastest growing steel market.
Most high-grade steel used by India's vehicle industry is imported from countries such as Japan and South Korea. India hopes partnerships like the ArcelorMittal and SAIL venture will reduce those purchases and turn the nation into an exporter.
The document, dated May 26, offered a "status report" on talks aimed at resolving a list of outstanding issues.
It was not immediately clear when a final deal would be reached. A preliminary agreement to set up the venture was signed in May 2015.
The proposal to export a fifth of the auto-grade steel made by the venture was listed as agreed by both parties in the document. A few proposals were listed as "under discussion".
Among the proposals that were also agreed were that ArcelorMittal waive a fee for the venture to use its brand and its research and technology, that any losses caused by delays in setting up the partnership would be borne by the venture and that the $913 million cost to establish the venture could rise.
NITI Aayog, chaired by Prime Minister Narendra Modi, has also proposed that the two companies should be offered an exit clause after more than 10 years, but a firm choosing to leave should give the other the first right of refusal.
SAIL and ArcelorMittal did not respond to emails seeking comment.
Luxembourg-based ArcelorMittal, the world's largest steel company controlled by India-born billionaire Lakshmi Mittal, had already agreed to make "some concession" to SAIL on technology, to seal the venture, Reuters reported last week.
The companies have also agreed to make an upfront investment of 3 billion rupees ($46.49 million) into SAIL's Rourkela steel plant in the eastern state of Odisha, which would supply the hot-rolled coils to the venture, according to the document.
The venture agreement with ArcelorMittal was extended until Wednesday, after the preliminary understanding signed in May 2015 lapsed on May 21, according to an email from SAIL sent to the steel ministry.