India’s industry balances rising costs, steel inputs and an export push
Garment exporters are absorbing higher wages and materials, metallurgical coal demand is shifting imports toward steel, and a state think tank wants chemical output doubled. Together, the developments show India’s industrial expansion meeting input and margin constraints.
Economics & Markets··Midday
Garment exporters absorb higher wages and materials
India’s garment exporters are expanding sales while labour and material costs narrow their room on margins. The Hindu BusinessLine reports that Pearl Global’s standalone revenue rose 27.4 per cent in the first quarter of fiscal 2027, but its standalone EBITDA margin fell to 6.6 per cent from 7.3 per cent a year earlier. Minimum wages increased 38 per cent in Haryana and 21 per cent in Noida. At Gokaldas Exports, a 35 per cent minimum-wage rise in Haryana translated into a company-wide wage increase of 14 per cent to 15 per cent, while managing director Sivaramakrishnan Ganapathi put the quarter’s additional wage cost at 200 million rupees. Arvind vice-chairman Punit Lalbhai estimated this year’s input-cost inflation at about 1 billion rupees, mainly from cotton and yarn, while order prices are fixed three to four months in advance. The companies’ responses include absorbing part of the increase, automation and capacity additions in lower-cost locations. A weaker rupee offers exporters some relief, but the reported margin movement shows that revenue growth and currency support have not removed the immediate cost pressure.[1]
Coal imports shift toward steelmaking grades
The composition of India’s coal imports is changing even though the total is broadly stable. The Hindu BusinessLine reports that imports were 244.2 million tonnes in fiscal 2026. An MCX report showed metallurgical grades rising 10.4 per cent while thermal coal declined 5.5 per cent. Within the metallurgical category, coking-coal imports increased 12.4 per cent to 63.7 million tonnes from 56.6 million tonnes, and pulverised-coal-injection grades rose 6.2 per cent to 20.9 million tonnes. Those movements took metallurgical imports to 84.5 million tonnes from 76.3 million tonnes. Non-coking imports fell to 159.7 million tonnes from 169 million tonnes as domestic supply improved. The MCX account places incremental demand in grades used by steel producers, where domestic coal does not meet required quality, making import volumes more responsive to steel output than to electricity demand. This is an input-quality constraint rather than a general increase in all coal dependence: domestic supply is displacing some non-coking imports while steelmaking continues to require specific imported grades. The result links industrial output to the availability and price of a narrower imported commodity basket.[2]
Chemical export targets raise the scale of the input challenge
A government-backed chemical strategy adds an export-growth ambition to these operating constraints. The Hindu BusinessLine reports that NITI Aayog set a combined chemical-export range of 76 billion dollars to 81 billion dollars by 2030 and called for production to double so India can reduce reliance on imports. The components are 45 billion dollars of speciality chemicals, 26 billion dollars of petrochemicals and 5 billion dollars to 10 billion dollars of inorganic chemicals. The plan assumes consumption growth of 10 per cent to 11 per cent and production growth of 14 per cent across five fiscal years. Its output range moves from about 110 billion dollars in fiscal 2023 to 220 billion dollars to 280 billion dollars in fiscal 2030. The report also lists job creation of 700,000 to 1 million by the end of the decade. These figures are targets in the NITI Aayog report, not realised exports or production. Alongside garment makers’ compressed margins and steelmakers’ need for imported coal of particular quality, the plan shows a common industrial tension: expansion depends on managing labour, materials and specialised inputs while preserving enough margin and capacity to compete in export markets.[1], [2], [3]
