India is building out its power grid faster than at any point in its history, and every new substation, distribution network and renewable energy park needs transformers. At the heart of every one of those transformers is a magnetic core made from Cold Rolled Grain Oriented (CRGO) electrical steel. In 2026, that material has become one of the most closely watched inputs in Indian manufacturing.
For transformer manufacturers and core-building job shops, the CRGO situation changes the economics of core cutting. When the raw material is scarce and expensive, every millimetre of scrap, every burr and every inaccurate lamination costs more. This article explains what is happening in the CRGO market, why it matters for core cutting operations, and what to look for in a CRGO core cutting machine today.
The CRGO Supply Picture in 2026
India consumes roughly 4 to 4.5 lakh tonnes of CRGO steel a year, while domestic production is only around 40,000 to 50,000 tonnes. That means close to 90% of the requirement is imported, mainly from China, Japan, Russia and South Korea.
Three developments have made the situation more pressing this year:
- Grid expansion: India plans to invest about ₹9.15 lakh crore in its transmission network by 2032, adding around 1.91 lakh circuit kilometres of lines and more than doubling transformer capacity to roughly 2,342 GVA.
- Trade action: In June 2026, the Directorate General of Trade Remedies (DGTR) began an anti-dumping investigation into CRGO and amorphous steel imports from China, Japan, South Korea and Russia. Industry bodies have warned this could raise transformer costs.
- Renewable integration: Solar and wind parks need step-up transformers and grid connections, adding to the demand from conventional distribution networks.
CRGO already accounts for a large share of a transformer’s material cost, often estimated at 25 to 30%. When that input becomes tighter and potentially costlier, the efficiency of the core cutting process moves straight to the bottom line.
Why Core Cutting Accuracy Matters More Than Ever
CRGO steel gets its low-loss magnetic properties from the orientation of its grains along the rolling direction. The way laminations are slit and cut can either preserve or damage those properties.
1. Material yield
Every lamination pattern, whether straight, step-lap or mitred, needs to be nested and cut with minimal offcuts. A small improvement in yield across hundreds of tonnes a year is a significant saving when the steel itself is in short supply.
2. Burr height
Burr on CRGO laminations can short adjacent layers through their insulation coating. This increases eddy current losses and raises no-load loss, which is one of the key parameters in a transformer’s efficiency rating. Sharp tooling and correct shear clearance are essential.
3. Dimensional accuracy
Length and angle accuracy affect how tightly the core stacks. Poorly matched joints create air gaps, which increase magnetising current and noise. Consistent cut-to-length accuracy makes core assembly faster and the finished core more efficient.
4. Mechanical stress
Rough handling, excessive bending or uneven tension during slitting and feeding can introduce stresses that degrade magnetic performance. A well-designed line handles the strip gently from decoiler to stacking.
What to Look for in a CRGO Core Cutting Machine
Whether you are setting up a new core shop or upgrading an older line, these are the capabilities that matter most in the current market.
Precision feeding and length control
Servo-driven feeding with encoder feedback gives repeatable lamination lengths batch after batch. Look for a control system that lets operators store and recall lamination programmes rather than resetting stops by hand.
Accurate shearing for straight and mitred cuts
Depending on your core design, you may need 90° cuts, 45° mitre cuts, or both. The shear design, blade quality and clearance setting should suit the thin gauges typical of CRGO.
Step-lap capability
Step-lap cores reduce no-load losses and noise compared with conventional joints. If your customers are asking for higher efficiency ratings, a line that can produce step-lap patterns efficiently is a strong advantage.
Upstream slitting quality
Most core shops buy CRGO in master coils that must first be slit to lamination widths. Clean, burr-controlled slitting is the foundation of good core quality. Read our guide on camber and burr defects in slit coils for the factors that affect edge quality.
Stacking and handling
Automatic or semi-automatic stacking reduces manual handling of sharp, thin laminations. It protects the insulation coating and improves operator safety.
Low scrap set-up
Fast changeovers between lamination sizes, with minimal trial pieces, matter more when every kilogram of CRGO is expensive.
How Transformer Manufacturers Are Responding
In conversations across the industry, a few clear responses to the CRGO squeeze have emerged:
- Bringing core cutting in-house: Manufacturers who previously bought ready cores are investing in their own cutting lines to control yield and quality directly.
- Tighter scrap tracking: Shops are measuring yield per coil and per design, then using that data to refine nesting and lamination programmes.
- Upgrading old lines: Older mechanical lines are being retrofitted or replaced with servo-controlled systems that hold tolerances more reliably.
- Planning for higher efficiency standards: As buyers push for lower-loss transformers, core quality becomes a selling point, not just a cost centre.
Checklist Before You Invest
Before you finalise a core cutting machine, work through these questions with your supplier:
- What lamination widths, thicknesses and lengths do you need to handle today and in five years?
- Which core types do you build: stacked, step-lap, mitred, or a mix?
- What burr height and length tolerance do your customers specify?
- How many lamination programmes do you change between in a typical shift?
- Do you also need a slitting line for CRGO master coils, or will you buy pre-slit material?
- What after-sales support, spare parts and tooling regrind service is available locally?
How Valgo Can Help
Valgo Machinery, based in Ahmedabad, has been manufacturing coil processing equipment since 2001. Our transformer core cutting machine is designed for CRGO lamination production, and our light gauge slitting line can prepare CRGO master coils to the widths your core designs require.
Every line is configured around the customer’s lamination sizes, core designs and output targets. If you are planning new capacity for the grid expansion cycle, talk to our team about your requirements.
Frequently Asked Questions
What is CRGO steel used for?
CRGO steel is used mainly for the magnetic cores of power and distribution transformers. Its grain-oriented structure reduces energy loss when magnetised along the rolling direction.
Why is there a shortage of CRGO steel in India?
Domestic production covers only a small share of demand, so India depends on imports for most of its requirement. Rising grid investment has increased demand, while import approvals and trade measures can affect supply.
What is a CRGO core cutting machine?
It is a line that feeds slit CRGO strip, cuts it into laminations of precise length and angle, and stacks them for transformer core assembly.
How does burr affect transformer performance?
Burr can damage the insulation coating between laminations, creating electrical contact between layers. This increases eddy current losses and raises the transformer’s no-load loss.
What is a step-lap core?
A step-lap core staggers the joints between laminations in several steps instead of one. This reduces flux concentration at the joints, which lowers no-load losses and noise.