India Encouraging Steel Firms: Acquiring Overseas Assets of Raw Materials

To strengthen its steel industry, India is actively endorsing domestic steelmakers to acquire overseas assets of raw materials such as iron ore and coking coal. This initiative, led by Steel Secretary Sandeep Poundrik, aims to secure supply chains as the nation races to expand its steelmaking capacity to 300 million tons by 2030, up from the current 200 million tons. 

Vital Importance of a Supply Chain 

India’s steel sector, standing at the backbone of its industrial growth, faces a critical challenge. The country imports 85% of its coking coal, a vital ingredient for steelmaking, primarily from Australia. The demand for coking coal is projected to skyrocket from 58 million tons to 160 million tons by 2030. In this regard, officials warn that supply chain disruptions or price fluctuations could derail production targets. “Raw material security is the backbone of our steel expansion plans,” Poundrik emphasized in recent statements. The push for overseas acquisitions aims to mirror strategies employed by global giants like Tata Steel, which acquired Anglo-Dutch firm Corus in 2007, and conglomerates like Adani, which secured Australia’s Abbot Point coal terminal to streamline supply chains.

Targeting Global Partnerships

To broaden supply sources, India is careful with assets in resource-rich nations such as Australia, Indonesia, and Mongolia. However, challenges persist. Mongolia, despite holding vast untapped  coal reserves, remains a hurdle due to its landlocked geography and underdeveloped infrastructure. Indian state-run miner NMDC is actively bringing opportunities in Indonesia and Australia. This would help facilitate existing infrastructure faster integration into India’s supply chain.

Domestically, the government’s Mission Coking Coal initiative seeks to boost local production from 52 million tons to 140 million tons by 2030 through advanced mining technologies and blending strategies. Yet, experts argue this will only partially offset import dependency, making overseas acquisitions non-negotiable.

Balancing Growth and Geopolitics – How Does India Maintain?

The move also reflects India’s broader economic vision. Coal Minister G. Kishan Reddy recently set raw material security to the nation’s goal of becoming a $5 trillion economy, stating, “A self-reliant steel sector is pivotal for infrastructure development and job creation.” However, the strategy is not without risks. Geopolitical tensions, environmental regulations, and competition from China—which already dominates global steel production—could complicate acquisitions. India has also imposed safeguard duties on steel imports and introduced quality control orders to shield domestic producers from cheap imports, particularly from China and South Korea.