Material Insights · Understanding the Material World

Electrical equipment and Steel

Electrical equipment needs ordinary steel for tanks, frames and transmission towers, but its critical link is grain-oriented electrical steel (CRGO) for transformer cores, which India makes in tiny volumes and imports for about 90% of its needs.

Electrical equipment (industry) and Steel (commodity): 4 relationships.

How they are linked

1. Industry input

Physical flow · Strong · Steel to electrical equipment

Transformer and motor cores are stacked from thin silicon-steel laminations that guide magnetic flux with low losses, while tanks, frames and lattice towers use structural steel; the site lists five enterprise types that depend on steel and rates it 5 of 5 for electrical steel producers.

  • 5 enterprise types in electrical equipment that depend on steel
  • 5 of 5 criticality for CRGO and CRNO electrical steel producers
  • 4 of 5 criticality for power and distribution transformer makers

Two steels matter in very different ways. Plain plate and sections for tanks, motor frames and towers are widely available, while grain-oriented electrical steel for transformer cores is made by few mills worldwide and has no near-term substitute in large transformers. Non-oriented grades serve motors and generators.

Enterprise types that depend on it:

  • Electrical steel (CRGO and CRNO) producers: base strip (criticality 5 of 5)
  • Power and distribution transformer makers: CRGO core and tank (criticality 4 of 5)
  • Copper and aluminium rod, conductor and winding-wire makers: conductor cores (criticality 3 of 5)
  • Switchgear, motor and drive makers: frames and laminations (criticality 3 of 5)
  • Substation and transmission EPC contractors: towers (criticality 3 of 5)

Sources: Material Insights

2. Price variation clauses

Cost and price · Strong · Electrical steel and plate prices pass into transformer prices

Indian transformer contracts use IEEMA formulae that index the price to CRGO and steel plate as well as copper, so steel price changes between tender and delivery pass to the buyer.

  • 27% CRGO weight in the IEEMA power transformer price formula, up to 400 kV
  • 12% steel plate weight in the same formula
  • 24% and 10% CRGO and steel weights above 400 kV

In the 2021 formula for transformers up to 400 kV, CRGO and steel plate together carry 39% of the price, more than copper's 32%. Prices are taken two months before delivery against a base one month before tender, so a CRGO price spike reaches utility budgets within the contract period.

Sources: IEEMA

3. CRGO import dependence

Shared risk · High in India · India's transformer makers depend on imported electrical steel

India has one CRGO producer, JSW JFE Electrical Steel, with small capacity while grid expansion drives demand, so most transformer core steel is imported from a handful of countries.

  • about 90% of India's CRGO requirement imported, 2026
  • 40,000 to 50,000 t India's domestic CRGO output a year, against 400,000 to 450,000 t demand
  • over 771,000 t India's electrical steel imports, 2023

India became China's largest electrical steel buyer in 2023, taking 189,184 tonnes, about 15% of China's exports. JSW JFE's Nashik plant makes about 50,000 tonnes a year, and a Bellary plant of 80,000 tonnes a year due by 2027 would lift capacity to over 130,000 tonnes, still well short of demand.

Sources: Fastmarkets; Outlook Business (GTRI analysis)

4. Anti-dumping probe

Policy · High in India · Trade defence on electrical steel raises costs for equipment makers

India's trade remedies authority is investigating CRGO and amorphous metal imports at the request of JSW JFE Electrical Steel Nashik, the only domestic producer, so duties would protect a small domestic supplier at the cost of transformer makers and utilities.

  • 4 countries covered by the CRGO anti-dumping probe, 2026

The DGTR probe covers imports from China, Japan, South Korea and Russia made between April 2025 and March 2026. GTRI argues higher duties would raise input costs across the power sector while giving limited protection, since imported CRGO already meets mandatory BIS certification.

Sources: Outlook Business (GTRI analysis)

For investors

Key learnings

  1. CRGO and steel plate carry about 39% of a power transformer's indexed price in India, more than copper, so steel is a first-order cost for transformer makers.
  2. India imports about 90% of its CRGO, so transformer output depends on foreign mills and on trade policy towards them.
  3. An anti-dumping duty would favour the sole domestic CRGO producer and raise costs for transformer makers, though price variation clauses pass much of it to utilities.

What to track

  • DGTR findings on CRGO and amorphous metal: Duties would raise core steel costs for transformer makers (As issued · DGTR, Ministry of Finance)
  • CRGO import prices and volumes by origin: Rising prices or falling volumes signal core steel tightness (Monthly · Commerce ministry TradeStat, Fastmarkets)
  • IEEMA CRGO basic price circulars: Sets the indexation applied to transformer contracts (Monthly · IEEMA)

For policymakers

Key learnings

  1. Domestic CRGO output of 40,000 to 50,000 tonnes a year against demand of 400,000 to 450,000 tonnes is a strategic gap in India's grid build-out.
  2. Trade protection for a single producer risks raising grid costs, so capacity support may achieve self-reliance with less cost to utilities.
  3. Even with the Bellary plant due by 2027, domestic capacity would be about 130,000 tonnes, so imports will remain necessary for years.

What to track

  • Domestic CRGO capacity and commissioning dates: Shows how fast import dependence can fall (Annual · Ministry of Steel, company reports)
  • Transformer capacity additions against grid plans: Signals whether core steel supply is constraining the grid (Monthly · Central Electricity Authority)
  • Electrical steel import share from China: A rising share deepens concentration risk (Annual · Commerce ministry TradeStat)

India

India imports about 90% of the CRGO steel its transformer makers need, with domestic output of 40,000 to 50,000 tonnes against demand of 400,000 to 450,000 tonnes, and in 2026 opened an anti-dumping probe into imports from China, Japan, South Korea and Russia.

Sources

  1. Electrical equipment: materials, Material Insights (2026)
  2. Price variation clause: power transformers (IEEMA/PVC/PWR TRF, 2021), IEEMA (2021)
  3. Geo-economic tensions fuel electrical steel race between China, India, Fastmarkets (2024)
  4. Why India's anti-dumping move could make power projects more expensive, Outlook Business (GTRI analysis) (2026)