Indian Court Dismisses Appeals of Steel Giants Amid Government's Met Coke Import Restrictions
In a significant legal and business setback, India’s Delhi High Court has rejected appeals from JSW Steel and Trafigura, both major players in the steel and raw materials sectors. The two companies had sought to bypass New Delhi’s import curbs on low-ash metallurgical coke, a key material used in steel production. These curbs, which were imposed in January 2025, aim to protect and promote the domestic supply of met coke, a critical input for the steel industry. The ruling highlights the growing tension between India’s domestic policy goals and the needs of multinational corporations operating in the country.
The Indian government’s new policy established country-specific quotas for met coke imports, with a total cap of 1.4 million metric tons for the period from January to June 2025. This decision was intended to curb rising imports, which had more than doubled over the last four years, and to give domestic suppliers a larger share of the market. However, this policy shift has stirred significant concern among major steel producers, particularly those like JSW Steel and ArcelorMittal Nippon India, who rely on high-quality imported met coke for their operations.
The Disputed Shipments and Legal Battle
Both JSW Steel and Trafigura filed legal challenges after facing rejection of shipments that had been ordered prior to the implementation of the new restrictions. JSW Steel had placed an order for $90 million worth of met coke, which was due to be shipped before the new policy took effect. However, the Indian government refused to allow the imports, citing that these shipments would exceed the newly imposed import quotas. Trafigura, a global commodities trading company, similarly filed a lawsuit to have one of its rejected shipments cleared, arguing that it should be allowed to bring in the met coke based on previously agreed terms.
On March 28, 2025, the Delhi High Court ruled in favor of the Indian government, rejecting the pleas from both companies. Judge Sachin Datta emphasized that the companies were well aware of the upcoming restrictions when they placed their orders, and the quantity of met coke they were seeking would exceed the quota limits. The court sided with the government's position that allowing these shipments would undermine the objectives of the new import restrictions.
The Government’s Stance and Steel Industry Concerns
The Indian government’s rationale for imposing import curbs on met coke is to promote the self-reliance of domestic steelmakers and protect local industries from an overdependence on imports. Met coke is an essential raw material in the blast furnace process for steelmaking, and rising import volumes have led to concerns about domestic supply security and the erosion of the local market for steel inputs.
However, the policy has drawn sharp criticism from large steelmakers, including ArcelorMittal Nippon India, which has warned that these import curbs could severely disrupt its operations. In private discussions with the Indian government, the company expressed concerns that it may have to cut back on production, and possibly delay expansion projects, if the restrictions remain in place. ArcelorMittal has also sought legal intervention, approaching the Delhi High Court to get some of its met coke shipments from Indonesia and Poland cleared, though this case remains pending.
The Broader Impact of the Policy
India, as the world’s second-largest producer of crude steel, plays a pivotal role in the global steel market. The steel industry is a crucial sector for India’s economy, providing millions of jobs and contributing significantly to industrial output. The new met coke import restrictions could have wide-reaching implications for the industry, particularly for companies like JSW Steel and ArcelorMittal Nippon India, who rely heavily on imported raw materials to maintain their production levels.
For JSW Steel, the Delhi High Court’s ruling comes at a time when it is already grappling with challenges in the global steel market. The company had been attempting to secure a $90 million shipment of met coke, which was vital to meeting its production needs. JSW Steel declined to comment on the ruling, but it is clear that the decision presents a significant hurdle for the company, particularly as it has ambitions of maintaining its position as a leading player in the global steel industry.
Moreover, the policy’s impact on India’s steel exports is another growing concern. As the country seeks to reduce its reliance on imports, the immediate effect has been to increase domestic prices for met coke, potentially making steel production more expensive. For steelmakers who export their products, higher input costs could make them less competitive on the global stage, impacting the long-term profitability of India’s steel industry.
The Policy's Ramifications for Steelmakers and the Economy
The met coke import restrictions have created an atmosphere of uncertainty within the steel industry. While the Indian government aims to protect domestic suppliers and encourage local production, it has inadvertently caused friction with multinational corporations and steel majors, who are concerned about the impact on their operations and the availability of high-quality raw materials.
In addition, the restrictions could also affect India’s steel production capacity. Steelmakers in India, particularly those reliant on high-grade imported met coke, may face difficulties in meeting their production targets. This could result in a shortage of steel, which may drive up prices and create challenges in meeting both domestic demand and export requirements.
As these policies continue to unfold, industry stakeholders will be closely watching the situation, with the potential for further legal challenges, especially from steel majors who continue to seek clarity on how to navigate these restrictions.
Key Takeaways:
• Court Denies JSW Steel and Trafigura’s Appeals: The Delhi High Court dismissed legal pleas from JSW Steel and Trafigura to allow certain shipments of metallurgical coke, siding with the Indian government’s import curbs policy.
• India’s Met Coke Import Restrictions: New restrictions, effective from January 2025, limit met coke imports to 1.4 million metric tons between January and June, with country-specific quotas.
• Impact on Steel Industry: Steel giants like JSW Steel and ArcelorMittal Nippon India have raised concerns about the impact on their operations, warning of potential production cuts and delayed expansion plans.
• Government's Intent: The Indian government aims to boost domestic production of met coke and reduce reliance on imports, thereby protecting local suppliers.
• Legal Challenges: Both JSW Steel and Trafigura challenged the new policy, seeking to clear shipments that were ordered before the restrictions were announced.
• Court's Ruling: The Delhi High Court ruled in favor of the Indian government, upholding the policy and rejecting the requests to clear shipments exceeding import quotas.
• Potential Effects on India’s Steel Production: The curbs could lead to higher steel production costs and create difficulties in meeting domestic and export demands for steel.
