CIL, a government-owned entity, aims to phase out imported high-capacity mining equipment worth Rs 3,500 crore over the next six years. This initiative is designed to boost domestic manufacturing of mining equipment and reduce reliance on imports.

Current imports, which encompass electric rope shovels, hydraulic shovels, dumpers, and more, have incurred an additional Rs 1,000 crore in customs duty over the past five years. CIL's approach involves a gradual six-year reduction in imports, with a focus on procuring high-capacity machines from domestic sources.

CIL is already in the process of acquiring high-capacity machines from local manufacturers, aligning with its objective of minimising dependence on imports.

To spearhead measures for enhancing domestic manufacturing in the mining sector, a high-level committee chaired by CIL's Director (Technical) has been established. The committee, anticipating significant equipment demand beyond 2030, envisions playing a crucial role in meeting the needs for both opencast and underground mines.

Representatives from the Ministries of Heavy Industries and Railways are part of the committee, fostering a collaborative approach to strengthen indigenous manufacturing. Given that Coal India contributes over 80% of domestic coal output, the strategic shift toward domestic manufacturing is poised to have a substantial impact.

Source: IIFL Securities