L&T Urges Continued Government Capex Despite Rising Import Bills Amid Middle East Tensions
Mumbai, March 22: Larsen & Toubro (L&T) has called on the government to maintain its capital expenditure momentum despite mounting concerns over rising import bills triggered by elevated commodity prices following the Middle East conflict.A senior company official indicated that sustaining infrastructure spending may require the government to increase borrowing or temporarily widen the fiscal deficit.
Government May Need to Borrow More to Sustain Growth
Deputy Managing Director Subramanian Sarma said that higher oil and gas prices are likely to push up the import bill, creating fiscal pressure.“The import bill will increase due to rising oil and gas prices. The government will need to manage this. They may temporarily increase the deficit, or they may borrow more,” Sarma stated.
He emphasized that India’s current fiscal position provides enough flexibility to ensure that infrastructure investments are not compromised. He also highlighted that the country has successfully reduced its fiscal deficit after the Covid pandemic.
Infrastructure Spending Key to Viksit Bharat 2047
L&T maintains that continued infrastructure investment is essential for achieving the long-term vision of Viksit Bharat 2047. The company stressed that capital expenditure remains a critical driver of economic growth despite external challenges.Energy Crisis May Accelerate Shift to Renewables
Sarma noted that the ongoing geopolitical tensions could trigger a reassessment of global dependence on oil and gas. He pointed to vulnerabilities such as the Strait of Hormuz, which could influence future energy strategies.The situation is expected to accelerate the adoption of alternative energy sources, including green hydrogen and renewable energy.
L&T Expands Green Hydrogen and Energy Portfolio
L&T reported progress in its green hydrogen business, increasing production capacity from 0.5 MW to 4 MW. The company currently has a manufacturing capacity of 250 MW per year.Out of this, around 95 MW will be deployed at a green hydrogen facility being developed for Indian Oil Corporation in Panipat.
In Gujarat’s Kandla, L&T is developing a large green hydrogen project, with the first phase involving an investment of USD 1.5 billion to USD 2 billion.
Thermal and Nuclear Energy Remain Strategic Focus Areas
While advancing clean energy initiatives, L&T expects thermal power to continue as a primary energy source in the near term.On nuclear energy, the company is in discussions with technology providers for potential partnerships. It expects the government to focus on pressurized heavy water reactors, while private players may take the lead in small and modular reactors.
Sarma added that L&T is positioning itself to participate in upcoming nuclear energy tenders, supported by policy changes following the passage of the SHAKTI Bill.
Global Expansion Plans Underway
As part of its diversification strategy, L&T is exploring opportunities in new international markets, including Indonesia and Australia. The company is also in discussions with oil firms in Africa to expand its global footprint.The developments come as L&T continues to align its business strategy with evolving global energy trends and infrastructure demands.
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