Dependency on Imported coking coal may become roadblock to India’s target of 300 MTPA steel capacity
As India’s steel sector works towards the government’s ambitious target of achieving 300 million tonnes per annum (MTPA) crude steel capacity by 2030–31, a new report highlights significant structural challenges that could slow down progress.
According to MP Financial Advisory Services LLP (MPFASL), the industry remains heavily reliant on imported coking coal, with imports meeting nearly 85 percent of demand — a major vulnerability for a sector considered vital to India’s infrastructure and manufacturing ecosystem. Other persistent issues include the limited availability of steel scrap, the need for widespread iron ore beneficiation, and high carbon dioxide emissions associated with current steelmaking processes.
The report also flagged global pressures, such as the inflow of cheaper steel imports from China, safeguard duties imposed by the European Union, and the emerging risk of carbon border adjustment tariffs. These external factors, coupled with high logistics costs, lengthy approval processes for greenfield projects, and steeper financing costs compared to China, add further strain to the domestic industry.
Despite these hurdles, MPFASL believes India can reach its capacity goal by adopting a multi-faceted strategy. This would involve accelerating investments in green and value-added steel, enhancing raw material linkages and logistics, advancing clean technologies, easing policy and financing norms, and fostering strong public–private partnerships.
“Addressing resource constraints, trade challenges, and sustainability imperatives through innovation and proactive reforms will be crucial in transforming India into a global hub for green and specialty steel, aligned with the vision of country’s $5 trillion economy” expressed the Founder and Managing Partner, MP Financial Advisory Services LLP, Mahendra Patil.
