India’s steel industry is facing a critical raw material shortage that could threaten its ambitious capacity expansion plans. According to a government document reviewed by Reuters, leading steel producers have formally requested a near sevenfold increase in the import quota for low-ash metallurgical coke, a key ingredient in blast furnace steelmaking. The proposed hike would raise the quota from the current 1.4 million metric tonnes to 9.3 million metric tonnes, underscoring the severity of the supply crunch.
The request, submitted to the Ministry of Commerce and Industry, comes amid mounting concerns that domestic coke production is insufficient to meet the demands of India’s rapidly growing steel sector. With the country targeting 250 million tonnes of crude steel production by 2030, the pressure on raw material supply chains is intensifying.
“Domestic met coke output simply cannot keep pace with the expansion of blast furnace capacity,” said a senior executive from a leading steel firm. “Without increased imports, we risk production bottlenecks and missed growth targets.”
What Is Metallurgical Coke and Why It Matters
Metallurgical coke, or “met coke,” is a carbon-rich material derived from coal, used primarily in blast furnaces to reduce iron ore into molten iron. Its low ash content is crucial for producing high-quality steel efficiently and with minimal environmental impact.
India’s domestic met coke production often falls short in both volume and quality, prompting steelmakers to rely heavily on imports from countries like Indonesia, Japan, Poland, China, and Switzerland. The current quota system, introduced in July 2025, caps imports at 1.4 million metric tonnes for the six-month period ending December 31, with country-specific limits that steelmakers say are too restrictive2.
Industry Expansion Meets Raw Material Roadblock
India is the world’s second-largest producer of crude steel, and its steelmakers—including JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India—are aggressively expanding capacity to meet rising demand from infrastructure, construction, and manufacturing sectors.
However, the proposed import curbs have sparked concern across the industry. JSW Steel, for instance, met with trade ministry officials last month to request a higher allocation of met coke, citing operational disruptions at its plants in Karnataka and Chhattisgarh.
The Indian Steel Association, in a letter dated August 1, warned that the current quota system could “hit the ramp-up of blast furnaces” and jeopardize the sector’s growth trajectory.
Global Sourcing Strategy
Steelmakers are seeking to source 2.6 million metric tonnes of met coke from Indonesia alone—far exceeding the current allocation of just 66,364 metric tonnes. Japan and Poland are also expected to play key roles in meeting the increased demand.
The government has yet to respond publicly to the industry’s request, though sources indicate that wider consultations are underway to assess the impact of relaxing import restrictions.
“The quota system was designed to protect domestic producers, but it must evolve to reflect the realities of industrial demand,” said an analyst tracking the steel sector.
Balancing Protectionism and Productivity
The import quota system was initially introduced to curb dependency on foreign suppliers and encourage domestic coke production. However, steelmakers argue that the current limits are misaligned with the pace of capacity expansion and the technical requirements of modern blast furnaces.
The industry is also urging the government to exempt met coke with ash content up to 12.5% from the curbs and remove country-specific restrictions on higher ash grades.
What’s Next
As the steel sector braces for a potential raw material bottleneck, all eyes are on the Ministry of Commerce and Industry’s next move. A decision to increase the import quota could stabilize production, support infrastructure growth, and maintain India’s competitive edge in global steel markets.
Until then, steelmakers continue to navigate logistical challenges, rising costs, and supply chain uncertainty—all while trying to keep the furnaces burning.
Sources: Economic Times, Money Control, MSN
