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Critical input import dependence
What it is
Where a material essential to production has no domestic substitute at scale and comes from a concentrated set of overseas suppliers, often a single country. Coking coal, CRGO steel, fluorspar, rare earths, refractory magnesia, PVC resin and pharmaceutical starting materials are all in this position
The exposure is structural rather than commercial - it cannot be hedged or negotiated away
Impact on industries
- Price and availability move on the supplier country's export policy rather than on Indian demand, and there is no alternative to switch to
- Export controls have already been used as leverage, so the risk is operational rather than theoretical
- Trade remedies protecting a small domestic producer raise costs for the far larger downstream industry that depends on the import
- Import-substitution schemes target exactly these inputs, and critical mineral status brings exploration incentives and lower royalties