India is moving closer to diversifying its critical raw material supply chains, with fresh discussions underway to develop coking coal trade with Mongolia’s state-owned miner Erdenes Tavantolgoi and the Steel Authority of India Limited. The initiative reflects growing urgency to secure stable inputs for steel production as infrastructure demand accelerates.Recent bilateral engagements have focused on pilot shipments of Mongolian coking coal to India, alongside the creation of a joint working framework to address logistics and technical feasibility. These discussions mark a shift from exploratory talks to more structured cooperation, signalling intent to operationalise a new supply corridor.
The strategic importance lies in India’s dependence on imported coking coal—a key ingredient in steelmaking. The country imports nearly 85% of its requirements, with a majority sourced from a limited set of suppliers. This concentration has exposed the steel sector to price volatility and supply disruptions, prompting policymakers and producers to seek alternative sources.Mongolia presents a compelling option. Its vast deposits, particularly at the Tavan Tolgoi basin, are among the largest reserves of high-grade coking coal globally. For Indian steelmakers, access to such reserves could reduce procurement risks while improving cost competitiveness over the long term.However, the opportunity is tempered by structural constraints. Mongolia is landlocked, and coal exports must transit through neighbouring countries, primarily China or Russia. These routes introduce geopolitical and logistical uncertainties, which have historically slowed progress on actual shipments. Industry experts note that resolving transport bottlenecks—rail connectivity, border handling, and multimodal logistics—will be critical to scaling trade beyond pilot volumes.
Despite these challenges, momentum is building. India’s steel sector is expanding rapidly, driven by infrastructure investment, urban construction, and manufacturing growth. Global forecasts indicate steady growth in coking coal trade, largely supported by India’s rising consumption needs. Establishing new supply partnerships is therefore not just a commercial decision, but a strategic necessity.Urban development implications are significant. Steel is a foundational material for city-building—used in transport systems, housing, renewable energy infrastructure, and industrial corridors. Reliable access to coking coal directly influences production costs, project timelines, and the overall pace of infrastructure delivery.The collaboration also aligns with broader efforts to strengthen economic ties between India and Mongolia. Beyond coal trade, discussions have included industrial cooperation, skills development, and energy projects, indicating a more integrated partnership approach.
Looking ahead, the success of this initiative will depend on execution—particularly in building viable transport corridors and ensuring consistent quality supply. If realised at scale, the partnership could reshape regional coal trade flows and provide India with a more resilient supply base for its steel sector.As global supply chains become increasingly uncertain, such cross-border resource partnerships are likely to play a defining role in supporting sustainable and reliable urban-industrial growth.
