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Steel Dreams, Coal Realities: Why India’s Growth Hinges on More Than Just Capacity

Updated: April 25, 2025 10:34

Image Source: Business Standard
India’s steel sector is on a rapid growth trajectory, but the journey is not without its challenges, according to Steel Secretary Sandeep Poundrik. As the country targets an ambitious 300 million tonnes (MT) of steel production capacity by 2030, the secretary has highlighted a likely increase in coking coal imports and identified logistics as the sector’s most pressing challenge, while expressing confidence in India’s ability to add new capacity.
 
Key Highlights:
  • Coking Coal Imports Set to Rise: With domestic coking coal production unable to keep pace with surging steel output, India’s reliance on imported coking coal is expected to grow. Imports are projected to increase by 6-7% in FY25, following a record 59 MT imported in FY24. This trend is driven by the expansion of blast furnace capacity and a forecasted jump in crude steel production to 152–155 MT this year.
  • Logistics Remain a Major Bottleneck: The secretary underscored that moving vast quantities of bulky raw materials and finished steel remains a costly and complex task. For every tonne of steel produced, three tonnes of raw material must be transported—mostly via rail, which is already strained. Freight costs in India are significantly higher than global benchmarks, and infrastructure constraints could make logistics “virtually unmanageable” as capacity doubles.
  • Capacity Creation Not a Concern: Despite global market headwinds and pricing pressures, the secretary is optimistic about India’s ability to add the required 100 MT steel capacity by 2030. Integrated steel producers and secondary players are already on track with major expansion projects, and India’s growing domestic demand provides a strong foundation.
As India’s steel ambitions soar, the sector’s success will hinge on tackling logistics bottlenecks and securing reliable coking coal supplies, even as capacity expansion remains on a steady path.
 
Sources: Economic Times, Business Standard, KNN India, Millennium Post, LinkedIn

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