KEY POINTS
- India targets 600 million tons of steel capacity by 2047.
- Current steelmaking capacity stands at about 220 million tons.
- Government plans to cut steel emissions intensity by about 39%.
India plans to more than double its steel making capacity to 600 million metric tons by 2047 under a new policy designed to meet rising demand, secure raw materials and reduce industry emissions.
The proposed steel policy will provide a long-term roadmap for the sector over the next two decades, according to India’s steel secretary, Sandeep Poundrik. India’s steelmaking capacity stood at about 220 million metric tons in fiscal 2026.
The new policy aims to increase that figure to 600 million metric tons by 2047 as the country anticipates stronger demand from infrastructure, construction, manufacturing and the automotive industry.
The draft policy also seeks to strengthen the domestic steel industry’s access to key raw materials, particularly iron ore and coking coal, which are essential for steel production.
India has increasingly focused on securing reliable supplies as global trade barriers and competition for raw materials create additional challenges for steelmakers.
India remains dependent on steel imports
The planned capacity expansion comes as India continues to import significant volumes of finished steel.
Between April and August, India imported 3.5 million metric tons of finished steel, an increase of 29.5% from the same period a year earlier.
China accounted for 31.8% of those imports, making it the largest supplier of finished steel to India during the period.
The country’s steel secretary said raw material availability and exports remain major challenges for the industry, particularly as more countries introduce trade restrictions.
Government targets lower emissions
The proposed policy also places greater emphasis on reducing the environmental impact of steel production.
According to the draft document reviewed by Reuters, India wants to reduce the sector’s average carbon emissions intensity to about 1.54 tons of carbon dioxide per ton of crude steel by 2047.
That compares with a current level of about 2.54 tons per ton of crude steel.
The planned reduction is linked to India’s broader target of achieving net-zero emissions by 2070.
The steel industry is one of the country’s major industrial sources of emissions, making improvements in production technology and energy efficiency an important part of the long-term strategy.
India plans to secure more iron ore
The government expects India’s iron ore demand to reach 772 million metric tons as steel production expands.
To meet that requirement, the proposed policy calls for greater access to high-grade iron ore reserves through overseas assets and joint ventures.
India is also looking to strengthen its access to coking coal, another critical steelmaking input.
Coking coal demand is projected to reach 214 million metric tons, according to the draft policy. The government plans to diversify supplies through what it describes as strategic global outreach and potential acquisitions of overseas assets.
Indian steel prices are also expected to come under upward pressure in the coming weeks as infrastructure and automotive demand increases following the monsoon season.
Executives and analysts told Reuters that stronger demand could tighten the domestic market, while higher coking coal costs could increase production expenses for steel mills.
The combination of higher domestic demand, raw material costs and global trade barriers is likely to remain a key consideration as India implements its long-term steel strategy.
