What Happened
- India is engaged in diplomatic and commercial discussions with Argentina, Indonesia, and Oman to secure long-term supplies of steelmaking raw materials — primarily iron ore, coking coal, and related inputs.
- Talks are expected to begin at a major global steel summit being organized by India — described as the country's largest international conference-cum-exhibition in the steel sector.
- The outreach reflects India's ambitious steel production expansion targets: the National Steel Policy (2017) envisions raising India's steel production capacity to 300 million tonnes per annum (MTPA) by 2030, from around 140-150 MTPA currently.
- Argentina is being targeted primarily for its iron ore and lithium resources; Indonesia for nickel, coal, and raw mineral supply chains; and Oman for its position as a gateway to Gulf-region industrial inputs.
- India's push comes amid global restructuring of raw material supply chains, with many countries diversifying away from dependence on single suppliers (particularly China in the case of processed steel inputs).
What Happened
- India is seeking raw material supply agreements across multiple countries to feed its rapidly expanding steel sector.
- The steel summit will serve as a diplomatic-commercial platform to formalize these discussions at government and industry levels.
- India's steel sector is strategically significant — steel is a key input for infrastructure, construction, defence, and manufacturing under the PLI (Production Linked Incentive) schemes.
Static Topic Bridges
India's Steel Sector: Scale, Ambition, and Raw Material Constraints
India is the world's second-largest steel producer, behind China. The National Steel Policy (2017) sets a target of 300 MTPA capacity and 255 MTPA production by 2030. Steel is a "core sector" industry and a key driver of employment and infrastructure expansion. However, India faces raw material constraints: while it has abundant iron ore reserves (fourth-largest globally), it is heavily dependent on imports of coking coal — the primary fuel for blast furnace steelmaking — from Australia, USA, and Canada.
- India's steel production FY2024: ~144 MTPA (world's second-largest producer)
- National Steel Policy 2017 target: 300 MTPA capacity by 2030
- Coking coal: India imports ~50-55 million tonnes per year; Australia supplies ~60-70% of imports
- Iron ore: India has estimated reserves of ~28 billion tonnes; export controls exist under Mines and Minerals (Development and Regulation) Act
- NMDC (National Mineral Development Corporation): India's largest iron ore producer (PSU under Ministry of Steel)
- Steel Scrap Recycling Policy (2019): promotes domestic scrap collection and processing as a supplementary input route
Connection to this news: The diversification efforts with Argentina, Indonesia, and Oman aim to reduce India's heavy dependence on Australian coking coal and to lock in long-term supply at predictable prices for the scale-up to 300 MTPA.
Global Steel Raw Material Supply Chains
Global steelmaking depends on three primary inputs: iron ore (predominantly from Australia and Brazil), coking (metallurgical) coal (Australia, USA, Canada, Russia), and scrap steel (recyclable). China dominates the processing of many intermediate steel products and rare earth-based specialty steels. The 2021-22 period saw extreme volatility in coking coal prices (peaking above $600/tonne) due to Australia-China trade tensions, which disrupted global supply chains and highlighted single-source dependency risks.
- Australia accounts for ~55-60% of globally traded coking coal
- BHP, Glencore, and Anglo American dominate global coking coal supply
- Argentina: emerging iron ore and lithium producer; also has coking coal reserves in Patagonia
- Indonesia: major thermal coal exporter; growing nickel production relevant to specialty steels
- Oman: key industrial hub with integrated steel plants (Jindal Shadeed is India-connected); strategic port access
- India's Steel Scrap Recycling Policy targets creating a formal scrap ecosystem to reduce virgin raw material needs
Connection to this news: India is seeking to replicate Australia's role as a reliable long-term supplier with diversified partners, reducing vulnerability to any single country's export policy decisions.
India's Diplomatic Economic Outreach: Critical Minerals and Industrial Policy
India's engagement with resource-rich nations for raw material security mirrors its broader Critical Minerals Strategy. The government has identified 30 critical minerals (including lithium, cobalt, nickel, and rare earths) essential for green energy and advanced manufacturing transitions. For steel, analogous strategic importance attaches to coking coal and iron ore. India has established bilateral mineral supply agreements with Australia (under CECA) and is pursuing similar frameworks with other mineral-rich nations.
- India's Critical Minerals List (2023): 30 minerals identified as strategically important
- Khanij Bidesh India Ltd (KABIL): government JV (NALCO, HCL, MECL) to acquire mineral assets abroad
- KABIL has signed MoUs with Argentina's lithium agency (CAMYEN) for lithium exploration
- India-Australia Critical Minerals Investment Partnership: signed 2023
- PLI schemes for specialty steel: ₹6,322 crore approved to incentivize domestic production of 57 grades of specialty steel
Connection to this news: The steel raw material diplomacy with Argentina, Indonesia, and Oman is part of the same strategic impulse driving India's critical minerals outreach — securing reliable, diversified supply chains for industrial inputs essential to the country's manufacturing ambitions.
Production Linked Incentive (PLI) Scheme for Specialty Steel
The PLI scheme for specialty steel, approved in 2021, aims to make India self-sufficient in high-value steel grades — stainless steel, high-strength steel, electrical steel — that are currently imported heavily. It provides incentives to manufacturers for incremental production of specialty steel, helping downstream sectors like automotive, defence, and renewable energy access domestically produced high-quality inputs.
- PLI outlay for specialty steel: ₹6,322 crore over five years
- Target: additional 25 MTPA capacity in specialty steel grades by 2026-27
- 57 grades of specialty steel covered: API grade pipes, coated steel, high-strength rail steel, electrical steel, etc.
- India currently imports ~4.5-5 MTPA of specialty steel annually
- Key beneficiary industries: automotive (CRCA/CRGO steel), defence, railways, renewable energy
Connection to this news: As India's PLI-driven specialty steel capacity expands, demand for high-quality raw material inputs — particularly coking coal and specific iron ore grades — will grow substantially, making the diplomatic raw material outreach even more strategically important.
Key Facts & Data
- India's steel production FY2024: ~144 MTPA (world's second-largest producer)
- National Steel Policy 2017 target: 300 MTPA capacity by 2030
- Coking coal imports: ~50-55 million tonnes/year; Australia supplies ~60-70%
- NMDC: India's largest iron ore PSU producer; under Ministry of Steel
- PLI for specialty steel: ₹6,322 crore; covers 57 specialty steel grades
- Steel Scrap Recycling Policy (2019): promotes formal domestic scrap ecosystem
- Coking coal prices peaked above $600/tonne during 2021-22 Australia-China trade tensions
- KABIL (Khanij Bidesh India Ltd): government JV for overseas mineral asset acquisition