(MENAFN- KNN India)
New Delhi, Oct 29 (KNN) In a concerning development for India's power sector, a severe shortage of Cold-Rolled Grain-Oriented (CRGO) steel is threatening to derail the nation's ambitious power infrastructure expansion plans, according to a comprehensive report released Monday by the Global Trade Research Initiative (GTRI).
The analysis reveals a staggering 30 percent supply deficit of this specialised steel, which is fundamental to manufacturing transformers and electric motors.
With domestic production satisfying merely 10-12 percent of the demand, India finds itself precariously dependent on international suppliers.
"The current crisis stems from bureaucratic bottlenecks in import certifications," explains GTRI Founder Ajay Srivastava. "The Bureau of Indian Standards' delayed license renewals for major suppliers from Japan, South Korea, and China have created significant market uncertainty."
The current fiscal year paints a stark picture of the supply crisis. In FY 2024, India's total CRGO demand reached 400,000 tonnes, while domestic production lagged significantly at just 50,000 tonnes.
Despite importing 239,200 tonnes from various countries including China, Japan, Russia, and South Korea, and accounting for exports of 11,400 tonnes, the nation faces a substantial deficit.
The available supply for local use stands at 277,800 tonnes, resulting in a critical shortfall of 122,200 tonnes, representing 30.6 percent of total demand.
The situation appears particularly dire given India's ambitious renewable energy targets. With plans to integrate 500 GW of renewable energy into the grid by 2030 and an anticipated annual CRGO demand growth of 10-12 percent, the supply constraints could have far-reaching implications.
Adding to the complexity, new energy efficiency regulations taking effect January 1, 2025, will require higher-grade CRGO steel for distribution transformers, potentially exacerbating the supply-demand mismatch.
The impact is most severe on MSMEs, which struggle to secure small quantities amid soaring prices and uncertain supplies. "This isn't just a materials shortage-it's a threat to our energy security and manufacturing capabilities," notes Srivastava.
Industry experts recommend a comprehensive approach to address the crisis. In the immediate term, streamlining BIS approval processes and expanding the approved supplier base could provide much-needed relief.
For long-term sustainability, developing domestic production capacity through strategic investments has become imperative.
Building domestic capability won't come cheap-estimates suggest a new CRGO plant would require USD 400-600 million and 3-5 years to establish a facility capable of producing 100,000-150,000 tonnes annually.
As the situation unfolds, the power sector watches anxiously. Without swift intervention, this shortage could compromise India's energy transformation goals and industrial growth trajectory.
(KNN Bureau)
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