Schedule a Call Back
Transformer steel shortage threatens India’s energy ambitions: GTRI
Industry News- Oct 30,24
CRGO steel, essential for reducing energy loss in transformer cores, plays a pivotal role in the country’s power distribution network.
India's plans to expand its power sector face significant risks due to a 30% shortage of Cold-Rolled Grain-Oriented (CRGO) steel, a key material for transformers and electric motors, according to a report by the Global Trade Research Initiative (GTRI). With domestic production fulfilling only 10-12% of the country’s demand, India relies heavily on imports to meet the shortfall.
The shortage is attributed to delays in the renewal of import licenses by the Bureau of Indian Standards (BIS) for key suppliers from countries like Japan, South Korea, and China. Many of these licenses are set to expire soon, creating uncertainty for power sector players. GTRI emphasised that the BIS certification process, required under the Quality Control Order (QCO) to ensure product quality, restricts the availability of CRGO steel by limiting options to approved grades and vendors.
"India must urgently review the BIS approval process with independent auditors to avoid further disruption," said Ajay Srivastava, Founder, GTRI stressing the need for immediate action to secure India's energy goals. CRGO steel, essential for reducing energy loss in transformer cores, plays a pivotal role in the country’s power distribution network.
In FY 2024, India required 400,000 tonnes of CRGO steel, but domestic production was only 50,000 tonnes. The country imported 239,200 tonnes from China, Japan, Russia, and South Korea, leaving a shortfall of 122,200 tonnes—or 30.6% of total demand—after exports.
With demand expected to grow by 10-12% annually, driven by India's expanding power sector and its goal to integrate 500 GW of renewable energy by 2030, the shortage poses a serious threat to the country’s energy ambitions. Additionally, new regulations by the Bureau of Energy Efficiency, requiring upgraded star-labels for transformers starting January 1, 2025, are expected to further increase the demand for high-grade CRGO steel.
"This shortage could affect not only energy and manufacturing targets but also limit India’s ability to export transformers and motors," Srivastava warned. He added that Micro, Small, and Medium Enterprises (MSMEs), which rely on small quantities of CRGO steel, are particularly impacted by rising prices and uncertain supplies.
To mitigate the shortage, GTRI recommends expediting BIS approvals for CRGO imports, expanding the list of approved grades and suppliers, and providing zero-duty import benefits for raw materials, similar to policies in countries like China, the US, and Germany.
Long-term solutions include boosting domestic production. Establishing a CRGO plant would require an investment of $400-$600 million for a facility with an annual capacity of 100,000-150,000 tonnes and could take 3-5 years to build, potentially with government incentives to support development.
The QCO, implemented by BIS in 2020, mandates that all CRGO steel used in India meet specific performance standards, but its restrictive nature is seen as a bottleneck that needs urgent reform to ensure uninterrupted supply.
(ET)
Related Stories
Policy Regulation
GTRI urges simplified customs duty structure to boost manufacturing and exports
According to GTRI, currently, 85% of tariff revenue is generated from just 10% of tariff lines or product categories, while 60% of tariff lines account for less than 3% of total revenue.
Read morePolicy Regulation
GTRI calls for steel sector assessment before safeguard duty imposition
The Directorate General of Trade Remedies (DGTR) began an investigation last month into imports of ‘Non-Alloy and Alloy Steel Flat Products,’ which are used in various industries such as constru..
Read moreMachine Tools & Accessories
SPC banks on ZEISS microscopy for quality assurance in the steel industry
Quality assurance for companies that produce and process steel are very important. SPC Werkstofflabor GmbH relies on ZEISS microscopy to inspects materials for quality assurance in the steel industr..
Read moreRelated Products
Programmable Controllers - Pcd-33a Series
CHEMICAL PROCESS, FOOD/PHARMA EQUIPMENT & ANALYTICAL INSTRUMENTS
Pro-Med Instruments (P) Ltd offers a wide range of programmable controllers - PCD-33A Series.
Gasket Graphite Powder
CHEMICAL PROCESS, FOOD/PHARMA EQUIPMENT & ANALYTICAL INSTRUMENTS
Arihant Packing & Gasket Company offers a wide range of gasket graphite powder.
Asahi Kasei expands 3D printing filament sales in North America
CHEMICAL PROCESS, FOOD/PHARMA EQUIPMENT & ANALYTICAL INSTRUMENTS
Asahi Kasei, a leading resin and compounding technology provider, has initiated the sales of 3D printing (3DP) filaments in North America through Asahi Kasei Plastics North America (APNA). The soft la Read more
latest News
Subscribe to iNoW
For Industry News on WhatsApp, Give a Miss Call on: +91 84228 74016
