India’s Energy Transition – Threat of CRGO in our Supply Chain

CRGO steel forms the core of power and distribution transformers which enables the efficient transfer of electricity across the grid with minimal energy losses. Its unique magnetic properties make it one of the most critical inputs for high-performance transformers, directly influencing their efficiency, reliability, and lifecycle costs.

August 24, 2026. By News Bureau

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Manufacturing ecosystem

Vikram Gandotra

India stands at the threshold of one of the most significant transformations in its power sector. As the nation accelerates towards becoming a USD 5 trillion economy, electricity will remain the backbone of industrial growth, digital infrastructure, urbanisation, and the clean energy transition. The coming decade will witness unprecedented investments in transmission and distribution networks to accommodate rising electricity demand, integrate renewable energy, and enhance grid resilience.

At the centre of this transition is Cold Rolled Grain Oriented or CRGO electrical steel. A fundamental component enabling the efficient delivery of power upon which this entire transformation relies.

CRGO steel forms the core of power and distribution transformers which enables the efficient transfer of electricity across the grid with minimal energy losses. Its unique magnetic properties make it one of the most critical inputs for high-performance transformers, directly influencing their efficiency, reliability, and lifecycle costs. As India's power infrastructure expands, the strategic importance of CRGO steel will only grow.

Every new transmission line and every new substation require transformers that can operate reliably for decades under varying load conditions. CRGO steel accounts for approximately 25–30 percent of the overall cost of a transformer. Uninterrupted availability of high-quality CRGO is essential for smooth running of the Transformer industry. High-quality CRGO steel enables manufacturers to produce transformers with lower or no-load losses, higher operational efficiency, and greater durability.

The growing emphasis on high-efficiency transformers also reflects evolving market expectations. As performance standards continue to improve, manufacturers are increasingly adopting advanced grades of CRGO steel that deliver superior performance/ energy losses. This evolution supports India's commitment to creating a modern, reliable, and environmentally responsible power system.

The current market size for power and distribution transformers in the country is estimated at 500 GVA, representing an estimated value of INR 45,000 crores, with capital investments in new capacities being added by 10 to 12 large companies at new investments of approximately INR 8,600 crores. The overall national requirement for CRGO steel stands at a little over 4 lakh metric tons, against which the country currently faces an estimated shortage of at least 1 lakh metric tons. This demand is primarily met by 10-12 global mills, with a large part of supplies from China, Japan and Korea. As per the government's power infrastructure expansion plan, transformer demand is likely to grow from 5.5 Lakh GVA to 7 Lakh GVA by 2032. This surge will drive an estimated CRGO demand in the range of 4.5 Lakh MT to 6 Lakh MT to support the rising manufacturing requirements.

To address CRGO shortages, consultations held by the Government of India over the past year concluded unanimously that a steady, uninterrupted supply of quality CRGO is essential. Given the unanimous consensus on this matter, it is unclear why a stop-start –stop approach to CRGO licensing continues, especially since domestic manufacturing is limited and meets only a fraction of the demand.

Industry and IEEMA welcome the investment and capacity expansion by JSW-JFE and eagerly await their production rollout. Until domestic output begins, however, the transformer industry simply asks for an uninterrupted supply of quality CRGO steel. The current stop-start licensing approach undermines confidence for both suppliers and manufacturers, making production planning difficult.

Ideally, until domestic production of CRGO steel reaches adequate levels to ensure self-sufficiency, this restrictive approach must be reviewed, as it will likely impact the power infrastructure development plans which are strongly linked to economic growth. Another potential impact is on industry employment which may be negatively affected as numerous transformer factories and lamination fabricators face idle capacity.

The expansion of domestic manufacturing under initiatives such as 'Make in India' reinforces the importance of developing a robust ecosystem for critical electrical materials. Ensuring consistent access to high-quality CRGO steel is essential for meeting domestic demand and strengthening India's position as a competitive manufacturing hub for electrical equipment.

The next decade presents a defining opportunity for India's energy transition. As the country builds a stronger, smarter, and greener grid, the importance of efficient transformer technology and uninterrupted access to high-quality CRGO steel cannot be overstated.

We hope policymakers will take cognisance of this critical need and ensure that adequate and timely measures are implemented to secure a steady supply for the industry and sustainably meet the nation's growing energy demand.

- Vikram Gandotra, President, The Indian Electrical & Electronics Manufacturers’ Association (IEEMA)