Luxembourg based steel and mining company ArcelorMittal has entered into a Memorandum of Understanding (MoU) with Steel Authority of India (SAIL) to build an automotive steel manufacturing facility in India.

As per the MoU, both the companies will build a cold rolling mill and other downstream finishing facilities in a joint venture.

The downstream finishing facilities will supply advanced steel products to the Indian automotive sector, which according to the company is expected to become the fourth largest automobile manufacturing country by 2020.

ArcelorMittal CEO Lakshmi Mittal said: " Bringing together our leading automotive technological capabilities with SAIL's production scale in India, in a similar manner to ArcelorMittal's partnership with Hunan Valin on our VAMA joint venture in China, is an exciting and powerful combination.

"The automotive sector is a highly strategic and important market for ArcelorMittal; establishing an automotive focussed production presence in India, one of the world's fastest growing automotive markets, is a natural progression in executing our global automotive strategy."

According to ArcelorMittal, India's existing domestic automotive steel production is not meeting the market demand, which will provide opportunity for both ArcelorMittal and SAIL to capture the market.