India's iron ore pellet industry faces severe capacity underutilization, rates declining 10 percentage points since fiscal year 2020-21 to approximately 75% despite robust steel production growth. Pellet imports surged from 8 million metric tons to 18 million metric tons over three years, Middle Eastern & North African suppliers offering $10-20 per metric ton cost advantages capturing market share. Domestic producers operating 120 million metric ton annual capacity generate only 90 million metric tons actual output, 30 million metric ton gap representing substantial stranded assets. Indian steelmakers prioritize procurement cost optimization, readily switching between domestic pellets, imports, & lump ore alternatives based on delivered prices, undermining domestic pellet industry viability.