Coal’s Supply Chain Bomb

Good Morning. Good morning. When we think of the Beirut blast in 2020, we wouldn’t often think of an Indian connection. But it has one. It quietly rewired India’s coal supply chain by forcing ammonium nitrate imports out of Visakhapatnam and into Paradip. The switch has raised costs, exposed new risks, and now faces a legal challenge that could disturb the country’s coal-fired energy lifeline.

India’s indices were on a losing streak for the seventh consecutive day. The BSE Sensex closed at 80,364.94, down 61.52 points or 0.08% and the NSE Nifty50 closed at 24,634.9, down 19.8 points or 0.08%.

In other news, Elon Musk’s X raises concerns about India’s content takedown rules amid a court case. Meanwhile, US president Donald Trump says he will impose a 100% tariff on foreign-made films.

DECODE THE NEWS

How An Explosion In Beirut Upended India’s Coal Supply Chain

By Akshay Deshmane

What? 

On August 4, 2020, the world watched in shock as a stockpile of poorly stored ammonium nitrate exploded in the port city of Beirut. The blast —  described as one of the biggest non-nuclear explosions in human history — killed over 200 people and displaced thousands, leaving Lebanon’s capital shattered. Thousands of kilometres away, in India, it triggered a chain of events that continues to complicate India’s coal supply chain five years later. 

The disaster in Beirut triggered the phasing out of ammonium nitrate imports at Vishakhapatnam port in Andhra Pradesh. This disrupted a decades-old supply chain that coal and explosives companies still haven’t recovered from. 

That move upended the way India’s coal and explosives industries sourced their most crucial input. Five years later, companies are still dealing with higher costs, fragile logistics, and a fresh legal challenge now threatening supplies again.

Why? 

India does produce ammonium nitrate domestically, but not enough to meet the needs of the coal-powered plants. This is why the ammonium nitrate imported through the Vishakhapatnam port was important for the country’s energy security. 

According to the Vishakhapatnam Port Authority and the Explosives Manufacturers Welfare Association (EMWA), prior to the Beirut blasts in August 2020, Indian companies were routing a major portion of their ammonium nitrate imports through Vishakhapatnam for at least two decades.  

Its location, infrastructure, and road and rail connectivity made it the logical choice.

In reaction to the Beirut blast, the Andhra Pradesh government wanted to phase out imports from the Vishakhapatnam port from January 28, 2021. 

However, the pushback was immediate. Official documents show the explosives companies, coal companies such as Coal India Limited (CIL), the world’s largest miner, and Singareni Collieries Company Limited (SCCL) were concerned about whether they will receive adequate supplies of ammonium nitrate for producing explosives for use in coal mines. 

While Odisha’s Paradip port stepped in as a replacement, the logistics chain for ammonium nitrate still stands slightly disrupted.

Now, an application filed at the National Green Tribunal could put even the future of Paradip port in doubt. 

THE CORE POLL

MESSAGE FROM OUR SPONSOR

Your career will thank you.

Over 4 million professionals start their day with Morning Brew—because business news doesn’t have to be boring.

Each daily email breaks down the biggest stories in business, tech, and finance with clarity, wit, and relevance—so you're not just informed, you're actually interested.

Whether you’re leading meetings or just trying to keep up, Morning Brew helps you talk the talk without digging through social media or jargon-packed articles. And odds are, it’s already sitting in your coworker’s inbox—so you’ll have plenty to chat about.

It’s 100% free and takes less than 15 seconds to sign up, so try it today and see how Morning Brew is transforming business media for the better.

Check it out

CORE NUMBER

4%

That’s India’s Index of Industrial Production (IIP) growth in August, up from 3.5% in July, according to data released by the Ministry of Statistics & Programme Implementation (MoSPI). Mining led the charge with 6% growth, followed by electricity (4.1%) and manufacturing (3.8%).

The Backstory: Within manufacturing, 10 of 23 industry groups expanded. The top drivers were basic metals (12.2%), motor vehicles (9.8%), and petroleum products (5.4%). By use-based classification, construction goods (10.6%), primary goods (5.2%), and intermediate goods (5.0%) powered growth. Consumer durables rose (3.5%), but non-durables slipped (-6.3%)

What This Means Going Forward: The August numbers signal resilience in core and infrastructure-linked sectors, but weak consumer non-durables suggest demand at the household level remains patchy.

Expert Speak: “Going forward, rising private consumption should support industrial production... However, a slowing world means softer exports, and the tariffs imposed by the US add to that drag,” said Dharmakirti Joshi, chief economist at Crisil on IIP data.

FROM THE PERIPHERY

Volkswagen’s India Strategy

Volkswagen Group is restructuring its India operations as it faces mounting challenges in a crucial growth market. The move comes amid a $1.4 billion tax demand—the country’s biggest-ever import levy case—and the exit of nearly 10 senior executives, including the finance chief and HR head, Reuters reported.

Flashpoint: Skoda Auto, which leads the group’s India strategy, has brought in external experts to review processes and recommend improvements, calling it the start of a ‘high performance organisation’ journey. Despite tripling revenues in five years to $2.15 billion, profits have plunged to $10.6 million, while Volkswagen and Skoda hold just 2% of India’s four-million-unit car market.

What's Next? With stricter fuel norms looming in 2027, the carmaker is racing to bring EVs to India, leveraging technology from China and a supply tie-up with Mahindra, even as legal battles threaten billions more in penalties.

Tariffs Strike Bollywood?

On Monday, US President Donald Trump renewed a threat from May: “I will be imposing a 100% Tariff on any and all movies that are made outside of the United States,” Trump wrote on Truth Social. 

Pivot: If this tariff comes to pass, who would pay more? Reuters reported that this could affect studios that depend heavily on cross-border productions. India has become a hub for post-production of American movies — these tariffs could impact that market too.

Fast Facts: Right now, it’s unclear whether he possesses the legal authority to impose this, though.

X Has An India Concern

X’s Global Government Affairs account posted on Monday morning that the company is “deeply concerned” about a Karnataka High Court ruling supporting the portal Sahyog. The government says that this portal will automate requests from various official arms to issue notices to intermediaries (social media/tech platforms / ISPs) under the IT Act, 2000, to remove or disable access to content that is alleged to be unlawful. 

Flashpoint: X argues that this portal is anti-free speech since it lacks a process for adequate judicial review or due diligence. X also stressed that Sahyog circumvents Section 69A of the IT Act and undermines safeguards laid down by the Supreme Court. 

Turning Point: The government insists that Sahyog improves efficiency and security by enabling faster coordination between agencies and platforms to curb misinformation, cybercrime, and other harmful online content.

Samsung’s India Bet

Samsung Heavy Industries has announced its entry into India’s shipbuilding sector through a partnership with Swan Defense and Heavy Industries (SDHI) in Gujarat, a move that aligns with New Delhi’s ambition to become one of the world’s top five shipbuilders by 2047.

The Backstory: SDHI, which accounts for 30% of India’s shipbuilding capacity and houses the country’s largest dry dock, will provide a strong base for Samsung to expand into India’s maritime logistics market, projected to grow 6.4% annually through 2030. The tie-up comes as India courts Korean shipbuilders to bolster local capacity, with officials even visiting Samsung’s Geoje facility last year.

Critical Moment: However, challenges remain: despite the finance minister’s 2025 budget announcement of a Rs 25,000 crore Maritime Development Fund to support shipbuilding and repairs, there has been little progress, underscoring the policy-to-implementation gap that continues to slow India’s shipbuilding push.

THE CORE QUIZ (Answers)

Question 1: 28% → 18% and 18% → 5%
Question 2: Tata Group
Question 3: IOCL

PODCASTS

Why Indian Markets Are Still Under Pressure

On Episode 691 of The Core Report, financial journalist Govindraj Ethiraj talks to Rohit Jain, Partner at Economic Laws Practice. We also feature an excerpt from our recent weekend edition featuring energy expert Dr Anas Al Hajji.

• Why Indian markets are still under pressure

• Why global investors are returning to China 

• Lower GST rates will hit sales numbers of consumer product companies even as HUL warns of turbulence in the next few months

• Gold, silver hit fresh record highs, what’s next?

THE TEAM

✍️ Zinal Dedhia, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas

🤝 Reach 80k+ CXOs? Partner with us.

✉️ Got questions or feedback? Reach out.

💰 Like The Core? Support us.