India Expands Mongolian Coking Coal Imports To Secure Steel Supply Chains
India is accelerating its strategic diversification of coking coal imports by turning to Mongolia, aiming to secure reliable raw materials for its steel sector. As the world’s second-largest crude steel producer, India currently relies on imports for 85% of its coking coal, exposing the industry to global price fluctuations and supply disruptions. Expanding Mongolian coal imports strengthens supply chain resilience, reduces dependency on traditional sources, and supports the country’s growing industrial and infrastructure demands.
Globally, steel producers are increasingly vulnerable to concentrated supply networks, where high-grade coking coal is geographically limited. Heavy reliance on a few dominant exporters leaves industries exposed to geopolitical tensions, trade restrictions, and sudden market shifts. “Diversifying sources is critical for operational stability and long-term competitiveness,” an industry expert noted, highlighting the strategic rationale behind India’s Mongolian engagement.Mongolia’s coal resources, previously underutilised due to logistical barriers and limited market access, are now emerging as a viable alternative thanks to new transport corridors, bilateral trade agreements, and port infrastructure upgrades. These developments allow India to procure high-quality coking coal more reliably and cost-effectively, enhancing supply security for steel manufacturers and downstream industries, including construction, automotive, and heavy engineering.
The initiative also reflects India’s broader industrial transformation goals. Securing consistent metallurgical coal supplies is essential for adopting energy-efficient steel production technologies and meeting environmental standards, which are increasingly linked to sustainable urban and industrial development. A senior policy advisor emphasised that “strategic sourcing supports both economic growth and environmental objectives, enabling India to expand steel production while reducing vulnerability to external shocks.”Experts suggest that diversifying coal imports could bring long-term economic and geopolitical benefits. By reducing over-reliance on a small set of suppliers, India not only safeguards its steel output but also strengthens its negotiating position in global markets. Additionally, improved cross-border infrastructure and logistic corridors may stimulate investment, create jobs, and foster sustainable trade practices between the two nations.
As India scales its steel production capacity to meet domestic and global demand, partnerships like this play a pivotal role in shaping resilient, future-ready supply chains. The Mongolian coking coal initiative demonstrates how industrial policy, infrastructure development, and trade strategy can converge to support both economic growth and sustainable industrial ecosystems. For India, diversifying coking coal imports is not merely a commercial decision—it is a strategic move to reinforce the backbone of its industrial expansion while mitigating environmental and market risks.
