Tata Steel's [Get Quote] proposed venture with Nippon Steel has become uncertain, with the Japanese company today signing a memorandum of understanding with the world's largest steel firm, Arcelor Mittal, for a global strategic alliance.

T Mukherjee, deputy managing director (steel), Tata Steel, said, "We (Tata Steel) proposed a joint venture with Nippon Steel. Now, we have to ask them whether they still want it."

He was speaking on the sidelines of the annual general meeting of Tata Metaliks [Get Quote], a part of Tata Steel.

Mukherjee said the joint venture discussed with Nippon Steel is for automotive steel sheets.

The broad contours of the discussions�the parties are yet to sign an agreement�suggested that the two companies would set up a plant with an annual production capacity of 1 million tonne of automotive steel sheets, at an investment of Rs 1,900 crore.

Tata Steel has a technical tie-up with Nippon Corporation for automotive steel production. Moreover, Nippon is also helping Tata Steel plan the layout of its proposed steel plant at Kalinga Nagar.

Industry sources said the proposed venture was conceived to cater to the growing demand of the economy which is growing at 9 per cent.

Tata Steel produces automotive sheets. But the proposed venture, perhaps, would produce a different grade and quality of sheets to complement Tata Steel's bouquet of products.

Tata Steel also has a technology agreement with Arcelor. Mukherjee said the agreement is expiring and the company will not renew it.