Multiple favorable factors are driving India to emerge as a major dry bulk importing country following China. Shipbroker Intermodal pointed out in its weekly report that amidst a global macroeconomic environment intertwined with geopolitical uncertainties and inflationary pressures, India still demonstrates strong resilient growth potential. Although the OECD forecasts India’s GDP growth will slow from 7.6% in fiscal year 2025-2026 to 6.1% in fiscal year 2026-2027, reflecting challenges such as energy supply disruptions, currency depreciation, and inflation, it is still expected to continue leading the G20 economies. The endogenous driving force of India’s economic growth stems from domestic demand, benefiting from an expanding middle class and accelerating urbanization, further consolidated by sustained public infrastructure investment. Policy support remains a core pillar maintaining this vitality. The federal budget for fiscal year 2026-2027 once again underscores the government’s determination to advance infrastructure, with approximately $147 billion allocated for public capital expenditure. This multi-year investment plan covers railways, highways, urban development, and technological infrastructure, collectively forming the infrastructure backbone of this transitioning economy.
Although energy-related disruptions continue to weigh on global industries, recent data shows that India’s industrial sector still demonstrates resilient capacity to withstand pressure. Industrial output in February grew 5.2% year-on-year, accelerating from January, mainly driven by manufacturing production. Meanwhile, infrastructure output also achieved 2.3% year-on-year expansion, recording the fourth consecutive month of growth. This is mainly attributed to strong demand for construction materials such as steel and cement, further amplified by sustained urbanization trends and large-scale infrastructure investments including the expansion of the national railway network.
Intermodal senior analysts pointed out that this favorable fundamental directly translates into strong performance in the steel sector. Steel Authority of India Limited (SAIL), one of India’s largest domestic steel producers, saw its fiscal year 2025-2026 performance increase 11.5% year-on-year, with both steel production and sales hitting record highs. The company has also made significant contributions to infrastructure construction, particularly supplying substantial quantities of steel to Indian Railways. From January to February 2026, India’s crude steel output was approximately 29 million tons, up 9.7% year-on-year, demonstrating the resilience of underlying demand. Looking ahead, the Indian government has set ambitious targets for domestic steel capacity expansion, planning to reach 300 million tons by 2030. The demand driven by urbanization and infrastructure investment, combined with these long-term capacity targets, indicates that India’s demand for steel and its key raw materials—coking coal and iron ore—will maintain a long-term upward trend.
This demand is further reinforced by the slow progress of the “green steel” transition. In terms of capacity and actual output, the blast furnace-basic oxygen furnace (BF-BOF) long process route still holds absolute dominance, cementing coking coal and iron ore at the core of India’s steelmaking processes. Due to the poor quality of domestic coal reserves, approximately 90% of India’s coking coal demand relies on imports, with the vast majority handled through seaborne trade. Given that the steel industry accounts for about 95% of domestic coking coal consumption, India’s steel expansion ambitions are directly dependent on the stable growth of imported coking coal supply. In this context, India is emerging as a key importer of coking coal. Its seaborne coking coal imports are expected to grow by about 10% in 2026, reaching approximately 87 million tons, equivalent to nearly 30% of global seaborne coking coal imports. Australia and Russia are the main suppliers, together accounting for over 70% of India’s coking coal imports. Meanwhile, discussions with the US side earlier this year indicate potential growth space for long-haul coking coal exports from the US to India, which currently accounts for about 10% of the supply.
Regarding iron ore, although India’s share of global seaborne imports is relatively small (about 1%), it is on an upward trend. Imports are expected to jump from 9 million tons to 14 million tons in 2026, reflecting both the continuous expansion of steel production and the rigid demand for supplementing high-grade materials to match domestic low-grade ore supply. Brazil is the preferred supplier, mainly exporting high-grade iron ore, followed by Oman and Australia.
Overall, India’s position in the coking coal and iron ore import markets will further strengthen in 2026 and beyond. The increase in seaborne volumes, coupled with long-distance trade routes such as “Brazil-India,” will continue to boost shipping demand for large and medium-sized bulk carriers (i.e., Capesize, Kamsarmax, and Supramax vessels) through dual drivers of cargo volume growth and ton-mile demand. The core underlying logic of this strong momentum lies in India’s accelerating urbanization, sustained infrastructure investment, and structural dependence on high-quality steelmaking raw materials that domestic production cannot satisfy.
