Material Insights · Understanding the Material World

Electrical equipment and Metal products

Transformers, switchgear and motors are largely shaped metal: tanks, cores, enclosures, frames and windings. Metal inputs are the biggest part of their cost, so electrical equipment prices follow metal product prices closely over a year, and India's near-total reliance on imported transformer steel is a constraint on its grid build-out.

Electrical equipment (industry) and Metal products (industry): 6 relationships.

How they are linked

1. Buys from

Physical flow · ₹5.1 per ₹100 · Electrical equipment buys from Metal products

Equipment makers buy fabricated tanks, enclosures, frames, fasteners, castings and wire from metal fabricators.

  • ₹5.1 of every ₹100 of Electrical equipment output, all rounds (India 2022)
  • ₹3 bought directly

This counts fabricated parts only; primary steel, copper and aluminium are separate industries in the tables, so total metal content of electrical equipment is much higher than this share.

Sources: OECD

2. Buys from

Physical flow · ₹0.9 per ₹100 · Metal products buys from Electrical equipment

Fabricators buy motors, welding sets, drives and switchgear for their shops.

  • ₹0.9 of every ₹100 of Metal products output, all rounds (India 2022)
  • ₹0.5 bought directly

A small cost line, mostly capital equipment, so it moves with fabricators' investment cycles rather than their output.

Sources: OECD

3. Industry input

Physical flow · Criticality 5 of 5 · Metal products to Electrical equipment

Four enterprise types in electrical equipment depend on metal products: electrical steel (CRGO and CRNO) producers on hot-rolled strip, transformer makers on tanks and structural steel, conductor and winding-wire makers on refined rod, and switchgear, motor and drive makers on sheet-metal enclosures.

These parts are bulky and often made to order, so local fabrication capacity matters; a shortage of tanks or enclosures can hold up delivery of finished transformers and panels.

Enterprise types that depend on it:

  • Machine-tool, press and welding-equipment makers: drives and controls (criticality 4 of 5)

Sources: Material Insights

4. Industry input

Physical flow · Criticality 4 of 5 · Electrical equipment to Metal products

Machine-tool, press and welding-equipment makers depend on electrical drives and controls.

Without motors and controls a press or welding line cannot run, so the input is essential even though it is a small cost.

Enterprise types that depend on it:

  • Machine-tool, press and welding-equipment makers: drives and controls (criticality 4 of 5)

Sources: Material Insights

5. Metal cost pass-through

Cost and price · Strong · Metal prices into equipment prices

Metals make up most of the material in transformers and switchgear, so changes in metal and fabricated part prices feed through to equipment prices.

  • 0.75 12-month change correlation, India WPI
  • 57 to 67% raw materials share of large power transformer cost, US makers, 2008 to 2010

Month to month the indices barely move together (correlation 0.15), but over a year the link is strong, with electrical equipment leading by about five months in the site's data, which suggests order books and contract pricing move ahead of fabricated metal prices. The US Department of Energy found that copper and electrical steel alone make up more than half of the cost of a large power transformer, so metal price swings dominate equipment cost changes.

Sources: Material Insights (World Bank, FRED, IMF data); US Department of Energy

6. Transformer steel imports

Shared risk · High in India · Imported CRGO limits transformer output

Cold-rolled grain-oriented (CRGO) steel forms the cores of transformers, and India makes only a small part of what it uses.

  • about 90% share of India's CRGO requirement imported, 2026
  • 40,000 to 50,000 t India's annual CRGO production
  • 400,000 to 450,000 t estimated domestic CRGO demand

In 2026 the Directorate General of Trade Remedies opened an anti-dumping investigation into CRGO imports from China, Japan, South Korea and Russia, on a complaint from JSW JFE Electrical Steel, India's only domestic producer. GTRI argued that higher duties would raise transformer costs without much reducing import dependence, since domestic capacity is far short of demand.

Sources: Outlook Business (GTRI analysis)

For investors

Key learnings

  1. Metal inputs dominate electrical equipment costs, so transformer and switchgear margins depend on whether contracts let makers pass metal prices through.
  2. Electrical equipment and fabricated metal prices move closely over a year in India, with equipment prices leading.
  3. India imports about 90% of its transformer core steel, so trade action on CRGO is a direct cost risk for transformer makers.

What to track

  • CRGO import prices and anti-dumping decisions: Higher duties raise transformer costs for Indian makers (As ruled · DGTR, Ministry of Finance)
  • India WPI for fabricated metal products and electrical equipment: Show cost pressure and pricing power along the chain (Monthly · Office of the Economic Adviser)
  • Transformer and switchgear order books: Long backlogs give makers room to pass on metal costs (Quarterly · company results, IEEMA)

For policymakers

Key learnings

  1. Grid expansion needs large volumes of transformer steel that India does not yet make, so domestic CRGO capacity is a strategic gap.
  2. Protecting domestic CRGO with duties can raise the cost of transmission and distribution projects while capacity is still small.
  3. Fabricated parts such as tanks and enclosures come from a fragmented base of small and medium firms, so their quality and scale affect how fast equipment makers can deliver.

What to track

  • Domestic CRGO capacity additions: Show progress in cutting import dependence (Annual · Ministry of Steel, company announcements)
  • Transformer prices in utility tenders: Indicate whether input costs are raising grid capex (Quarterly · CEA, state utility tenders)

India

India makes only 40,000 to 50,000 tonnes a year of the 400,000 to 450,000 tonnes of transformer steel it needs and imports about 90%, so metal supply is a real constraint on its transformer industry and grid build-out.

Sources

  1. OECD Input-Output Tables 2025 edition, India 2022, OECD
  2. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  3. Industry map: Metal products, Material Insights (2026)
  4. Industry map: Electrical equipment, Material Insights (2026)
  5. Large Power Transformers and the U.S. Electric Grid, April 2014 update, US Department of Energy (2014)
  6. Why India's anti-dumping move could make power projects more expensive, Outlook Business (GTRI analysis) (2026)