India looks to cut imports, boost coking coal production to reduce steel costs

Steel Secretary Sandeep Poundrick has described the lack of increase in production of steel-grade coking coal as a major challenge in increasing India’s steel production. He said discussions are underway with the Coal Ministry to increase the share of domestic coking coal in steel making to reduce import dependence and reduce production costs.

Assuring that India has enough iron ore reserves to meet both domestic demand and export requirements, Poundrick said the most expensive raw material in steel making is not iron ore but coking coal. He pointed out that 90% of India’s coking coal is imported – the dependency is likely to increase as steelmaking capacity increases.

According to a September 2025 report by the Indian Steel Association (ISA) and EY Parthenon, India’s coking coal imports are projected to increase by 42% to 115 million tonnes by 2030 due to rising demand in the steel sector.

Under the National Steel Policy, the country aims to reach 300 million tonnes of steel manufacturing capacity by FY 2030-31 and 500 million tonnes by 2047. India imported 81 million tonnes of coking coal in FY2015, and in line with the higher capacity target, demand is expected to grow 55% to 135 million tonnes by FY2030.

Also read: Asian Energy Service Bag ₹459 Ten million Coal Handling Plant Project in Odisha

Speaking at the CII Steel Summit in New Delhi, Poundrick said that although many countries now consider the availability of steel as a “national security measure”, the public perception of the sector needs to change. Contrary to the perception that the industry is dominated by big players, he said about 50% of India’s steel is produced by 22,000 MSMEs. He blamed the recent closure of 150 small companies on the five-year low in steel prices.

Highlighting the challenges in exports due to trade barriers such as the EU’s Carbon Border Adjustment Mechanism (CBAM), Poundrick stressed the need to cut the sector’s carbon footprint. He said the ministry has launched pilot projects with steel companies to produce green steel through blast furnace and DRI routes, taking advantage of the expected decline in green hydrogen prices over the next decade.