India's steel industry is booming. Crude steel production crossed 150 million tonnes, capacity expansion is running ahead of schedule, and the country is now the world's second-largest producer. By most measures, Indian steel is a success story. But there is one category of steel the country still cannot make at scale, and it happens to be the one that matters most for the grid, the energy transition, and the entire electrification programme.

Virtually every power and distribution transformer on earth uses a core made of grain-oriented electrical steel, known as CRGO. It is a silicon-iron alloy, 0.23 to 0.35 millimetres thick, with its crystal grains aligned in a specific crystallographic orientation (the Goss texture, {110}<001>) so that magnetic flux flows through the core with minimal energy loss. For conventional high-efficiency cores it remains the dominant material, with amorphous metal the one real alternative in specific distribution applications. The transformer is the universal interface between electricity generation and consumption, and CRGO is the material that makes the transformer work.

India consumes 400,000 to 450,000 tonnes of CRGO per year. Domestic output is estimated at 40,000 to 50,000 tonnes, about 10 to 11% of demand. The rest is imported, primarily from China, Japan, South Korea, and Russia. This is not a legacy gap from an era of industrial underdevelopment. It is a current, structural vulnerability in a material that sits at the centre of India's grid expansion, energy transition, and electrification programmes.

This article is the reference guide to India's CRGO problem. It covers the material itself, the global supply base, India's demand and production picture, the policy instruments in play, and the structural requirements for closing the gap. It draws on data from the US Department of Energy, DGTR investigation filings, company disclosures, and industry reports.

What makes this steel hard to replace

CRGO steel contains approximately 3 to 3.3% silicon by weight. The silicon raises the steel's electrical resistivity by roughly five times compared to plain carbon steel, which reduces eddy-current losses when the core is subjected to alternating magnetic fields. The basic operating condition of every transformer.

The "grain oriented" designation refers to the Goss texture: a specific arrangement of crystal grains where the easy magnetisation direction aligns with the rolling direction of the strip. This alignment is achieved through a complex metallurgical process called secondary recrystallisation, in which a population of precisely oriented grains grows at the expense of all others during a high-temperature anneal at approximately 1,200°C. The process depends on grain-growth inhibitors (manganese sulphide (MnS) and aluminium nitride (AlN)) that suppress the growth of misoriented grains while allowing the Goss-oriented grains to consume them.

The result is a material with magnetic properties that are dramatically better in the rolling direction than in any other. Core losses (the energy wasted as heat in the transformer core) are 30 to 50% lower in CRGO than in non-oriented electrical steel. This matters because transformers operate 24 hours a day, 365 days a year. The cumulative energy saving from lower core losses over a transformer's 25 to 40-year lifetime is substantial, and it compounds across the millions of transformers in a national grid.

The Ministry of Steel put it plainly when it launched PLI Scheme 1.1 in January 2025: the technology to make CRGO is not available with any of the Indian steelmakers. The PLI scheme places CRGO at its highest incentive slab explicitly because of this technology gap.

The producer list keeps getting shorter

Industry estimates put the number of companies worldwide producing grain-oriented electrical steel at fewer than a dozen. The number has been shrinking, not growing. In 2009, there were 13 independent GOES producers. Since then, WISCO merged into Baowu, AK Steel was absorbed by Cleveland-Cliffs, Orb Electrical Steels in the UK shut down permanently, and thyssenkrupp exited India.

Global GOES Producers. Estimated Capacity (2024)
Thousands of tonnes per year. China has grown from 90kt in 2009 to 2.95 Mt.
0 400 800 1,200 1,600 1,160 Baowu 1,500+ China (other) 350 NLMK 330 Nippon 280 JFE 250 POSCO 250 tkSE 200 Cliffs

The supply base divides into two tiers. Tier 1 producers (Nippon Steel, JFE, thyssenkrupp, POSCO, and Cleveland-Cliffs) make the full range of grades: conventional (CGO), high-permeability (Hi-B), and domain-refined. Tier 2 producers (Baowu, TISCO, Shougang, NLMK, and JSW JFE) focus on conventional and some Hi-B grades. The distinction matters because the highest-performance grades are made by the fewest producers, and India's efficiency regulations are pushing demand toward exactly those grades.

China's transformation is the defining shift. In 2009, China produced about 90,000 tonnes of GOES and imported heavily from Japan. By 2024, Chinese GOES output had reached 2.95 million tonnes, more than the rest of the world combined. Baosteel (now part of Baowu) alone has 1.16 million tonnes of capacity. China exported 666,300 tonnes of GOES in 2024, up from 494,800 tonnes in 2023, and is projected to exceed 700,000 tonnes in 2025.

China has simultaneously imposed its own anti-dumping duties on GOES imports from Japan, Korea, and the EU since July 2022, protecting its domestic market while flooding everyone else's.

How big is the gap, exactly?

India's CRGO consumption of 400,000 to 450,000 tonnes per year is driven by the transformer manufacturing industry. The country is the world's third-largest transformer market. Demand is growing at approximately 5% per year, driven by three structural factors: grid expansion (Rs 9.15 lakh crore investment pipeline through 2032), renewable integration (500 GW non-fossil capacity target), and transformer replacement under tightening BEE efficiency norms.

India's CRGO Supply vs Demand
Thousands of tonnes per year. Domestic production covers ~11% of current demand.
Demand: 400–450 kt/yr Domestic: ~50 kt (JSW JFE) Import gap: 350–400 kt/yr (90%) 2026 snapshot

Against this demand, India has one domestic producer: JSW JFE Electrical Steel, a 50:50 joint venture between JSW Steel and JFE Steel of Japan. JSW JFE operates a plant at Nashik, Maharashtra, with a current capacity of approximately 50,000 tonnes per year. It produces conventional CRGO (CGO grades). Tier 2 product. It does not produce Hi-B or domain-refined grades.

The joint venture is investing Rs 5,845 crore to expand capacity to 350,000 tonnes per year. 250,000 tonnes at Nashik (including the acquired thyssenkrupp plant) and 100,000 tonnes at a new line at Vijayanagar, Karnataka. Full commissioning is expected by approximately FY2028.

Even at 350,000 tonnes, the gap persists. With demand projected at 600,000 to 770,000 tonnes by 2030, India will still import 35 to 55% of its CRGO. A significant improvement from 90%, but not self-sufficiency. And the grade gap remains: JSW JFE makes conventional grades, while the market increasingly demands Hi-B and domain-refined for lower-loss transformers mandated by BEE norms.

thyssenkrupp built the plant, then sold it

Before JSW JFE, India's first CRGO producer was thyssenkrupp Electrical Steel, which built a plant at Nashik. thyssenkrupp is one of the world's leading GOES producers. Its powercore brand spans the full grade range. The Nashik plant produced CRGO, employed roughly 500 people, and generated a turnover of about Rs 1,271 crore in FY2024.

In October 2024, thyssenkrupp sold the entire operation to JSW JFE for approximately Rs 4,051 crore and exited India.

The exit is the single most instructive event in India's CRGO story. thyssenkrupp produced its silicon-steel substrate in Germany, shipped it to Nashik, and finished it into CRGO. The ocean freight, customs, port handling, and inland transport added cost at every step. At 50,000 tonnes of annual output, those logistics costs made the operation uncompetitive. Building local substrate production would have required thyssenkrupp to become an Indian integrated steelmaker. An investment of thousands of crores for a single CRGO line.

JSW JFE solves this by using JSW Steel's existing Indian steelmaking infrastructure for substrate. JSW produces silicon-steel hot-band at its integrated plants. JFE supplies the grain-orientation technology. The substrate does not cross an ocean.

The structural rule: CRGO in India requires a foreign technology partner (for the Goss texture process) paired with an Indian integrated steel company (for local substrate production). A pure import-and-finish model fails. Every future entrant must respect this lesson.

The grade gap widens as norms tighten

Not all CRGO is equal. The grade determines the magnetic performance and the price, and the number of producers narrows as the grade rises.

Tier Grade Family Core Loss (W/kg) Suppliers India Status
Tier 1 Conventional CGO (M5, M6) 1.05–1.30 at 1.7T/50Hz All GOES producers JSW JFE produces
Tier 2 High-permeability Hi-B (M3, M4) 0.85–1.05 5–6 globally 100% imported
Tier 3 Domain-refined (laser/plasma) 0.70–0.85 3–4 globally 100% imported

BEE's tightening efficiency norms for transformers are pushing the market toward Hi-B and domain-refined grades. A transformer built to the latest IS 1180 efficiency levels and BEE star-rating norms needs lower core losses than what conventional CGO can deliver at competitive economics. The grade gap is therefore not a static problem. It is getting worse as regulations tighten, because India produces only the lowest tier while the market moves toward higher tiers.

Four instruments, none of them enough

India's approach to the CRGO gap involves four policy instruments, each addressing a different aspect of the problem. They work as a stack, no single instrument is sufficient alone.

India's CRGO Policy Stack
Four instruments, each targeting a different lever. The stack works only as a set.
PLI Scheme (4–15%) Reduces operating cost per tonne once running BIS IS 3024 QCO Creates import friction via certification Anti-Dumping (Jun 2026) If imposed, could raise landed costs 15–25% State-Level Incentives Land, power, tax holidays reduce capex

The incentive got sweeter three times

The Production Linked Incentive scheme has been issued in three versions (PLI 1.0, 1.1, and 1.2) each sweetening the terms for CRGO. The current top slab is 15% on incremental sales. PLI 1.1 lowered the investment threshold to approximately Rs 3,000 crore and the capacity threshold to 50,000 tonnes, with production carry-forward to accommodate slow ramp-up. The successive revisions signal that the government recognises the original incentive was insufficient.

A licence per grade, per plant

The QCO makes BIS certification mandatory for all CRGO sold in India, imported and domestic. Material must conform to IS 3024:2015, and foreign mills must be registered with BIS before they can supply, a process that takes months. This creates import friction by adding time and compliance cost to every import shipment.

Who ends up paying the duty?

On 22 June 2026, DGTR initiated an anti-dumping investigation on CRGO imports from China, Japan, South Korea, and Russia. The complainant is JSW JFE Electrical Steel. India's sole producer and the entity that would benefit from duties. If duties are imposed, the landed cost of imported CRGO rises by an estimated 15 to 25%, giving the domestic producer a structural price advantage.

The investigation creates an infant-industry paradox. India needs domestic CRGO capacity, nobody disputes this. But with domestic capacity at 50,000 tonnes and demand at 400,000+ tonnes, imposing duties on all four source countries raises costs on 350,000 to 400,000 tonnes of imports that no domestic producer can replace in the near term. The Rs 9.15 lakh crore grid investment pipeline absorbs every rupee of that cost increase.

GTRI flagged this directly: anti-dumping duties on CRGO could escalate costs across the entire grid infrastructure programme.

Land, power and tax holidays

Karnataka, Gujarat, Maharashtra, and Odisha offer packages for large-scale steel investment, concessional land, industrial power tariffs, state-level tax holidays. These reduce the establishment cost for a CRGO line. JSW JFE's Vijayanagar expansion and any future Nippon Steel or POSCO plant would benefit from state-level support.

The shortlist is short

India needs a second CRGO producer. Single-supplier dependence on a grid-critical material is a structural risk that scale alone does not solve. The thyssenkrupp lesson constrains the candidate pool: the entrant needs both GOES technology and access to an Indian integrated steel substrate.

Second Producer Candidate Assessment
Screening by technology capability and India platform access.
CANDIDATE TECHNOLOGY INDIA PLATFORM VERDICT Nippon Steel ORIENTCORE HI-B AM/NS Hazira Tier 1 POSCO PHD-Core Needs non-JSW partner Tier 1 NLMK Transformer steel No India base Tier 2 Baowu Largest globally Blocked (Press Note 3) Blocked

Nippon Steel is the strongest candidate. It invented high-permeability GOES (ORIENTCORE HI-B) and makes the full range including domain-refined grades. It already operates in India through AM/NS India, the ArcelorMittal-Nippon Steel joint venture at Hazira, Gujarat. An integrated steelmaker expanding to 15+ million tonnes with Rs 55,000 crore investment. Hazira produces hot-rolled coil (the substrate), has land, port access, and industrial infrastructure. Adding a CRGO line would replicate the JSW-JFE model with Hi-B capability from day one. The competitive pressure is real: JFE (Nippon Steel's domestic rival) is already manufacturing CRGO in India.

POSCO has world-class GOES technology (PHD-Core domain-refined) and deep India intent. It signed a definitive agreement with JSW for a 50:50 JV to build a 6 MTPA integrated plant in Odisha. But the JSW connection complicates a CRGO play, since JSW is already partnered with JFE for electrical steel. POSCO would need a different Indian partner (SAIL, JSPL, or Tata Steel) adding JV negotiation time.

NLMK/VIZ-Stal has capability (350,000 tonnes, 80%+ exported) but no Indian platform, faces sanctions and payment complications, and is named as a target in the anti-dumping investigation.

Baowu has the largest GOES capacity globally but is effectively blocked by Press Note 3, which requires government approval for FDI from countries sharing a land border with India.

What 2030 will ask for

India's CRGO demand is structural, not cyclical. Three forces drive it:

Grid expansion. The Rs 9.15 lakh crore investment pipeline through 2032 includes 1,91,000 circuit-km of new transmission lines and 2,342 GVA of transformer capacity. Virtually all of that capacity needs a CRGO core.

Renewable integration. Solar and wind are distributed, hundreds of smaller installations across wide geographies, each requiring its own step-up transformer. The ratio of transformer capacity to generation capacity is higher for renewables than for thermal power. India's 500 GW non-fossil target means proportionally more transformers, more substations, more CRGO.

Replacement cycle. India's transformer fleet includes units that are 30 to 40 years old, running with high losses. BEE's tightening norms require replacement with lower-loss units, typically requiring higher-grade CRGO than the original.

Demand Driver Incremental Impact By When
Grid expansion (new transformers) +100,000 to 150,000 t/yr Through 2032
Transformer replacement (BEE norms) +30,000 to 50,000 t/yr Ongoing
Renewable integration (solar/wind step-up) +50,000 to 80,000 t/yr Through 2030
Distribution upgrades (smart grid, urban load) +20,000 to 40,000 t/yr Ongoing
Projected total demand (~2030) 600,000 to 770,000 t/yr

Against projected demand of 600,000 to 770,000 tonnes by 2030, domestic capacity will be 350,000 tonnes if JSW JFE's expansion is fully commissioned. Import dependence drops from 90% to roughly 50 to 55%. A second producer adding 100,000 to 200,000 tonnes could bring it below 30%, but that requires a commitment now, construction and commissioning take four to five years.

Protection without production

India's CRGO problem is not a single problem. It is a stack of interrelated challenges, each requiring a different instrument.

Volume. JSW JFE's expansion to 350,000 tonnes is necessary but not sufficient. A second producer (most likely Nippon Steel through AM/NS Hazira) would bring domestic capacity to 450,000 to 550,000 tonnes and break the single-producer monopoly.

Grades. India makes conventional CGO only. The market is moving to Hi-B and domain-refined under BEE efficiency norms. Nippon Steel's entry would solve this, ORIENTCORE HI-B from day one. Without grade migration, import dependence persists where it matters most.

Trade policy. Anti-dumping duties must be calibrated, not blanket. Grade-differentiated duties (protecting grades India can make, exempting grades it cannot) avoid penalising the transformer industry for the absence of domestic Hi-B. Time-bound duties that phase down as capacity ramps create urgency to build, rather than permanent rent.

Timeline. The grid expansion will not wait. Transformers are needed now. Every month of CRGO supply friction is a month of grid commissioning delay. Policy must bridge the gap years (2026-2028) between current capacity and expanded production without making the grid more expensive than it needs to be.

The energy transition does not reduce CRGO demand. It increases it, structurally and permanently. India's 90% import dependence is not a legacy problem. It is a current vulnerability in the exact material the future requires more of. The question is whether the country builds the steel capacity fast enough to match the grid ambition, or whether protection without production simply makes the grid more expensive.

Sources