OPINIONSteel, scale and sustainability: India's road to 2047
India's steel industry is scripting a new chapter as it plans to grow into a global manufacturing powerhouse while lowering the carbon cost of every tonne. The draft National Steel Policy–Vision 2047 sets an ambitious direction, proposing about 604 million tonnes per year (MTPA) of crude-steel capacity and 505 million tonnes of finished-steel demand by 2047. It also envisages per-capita consumption of 302 kilograms and exports of 45 million tonnes, including steel embodied in manufactured goods.
India’s crude-steel capacity was around 222.7 million tonnes as of July 2026, so the 2047 target is nearly three times today’s level. Crude-steel production reached 168.4 million tonnes in 2025–26, up from 89.0 million tonnes in 2014–15. Finished-steel production was 160.9 million tonnes and consumption was
163.7 million tonnes. Output nearly doubled over the decade as infrastructure, urbanisation and manufacturing expanded.
India ranked second in crude-steel production in 2025, behind China, which produced about 961 million tonnes. India became the world’s second-largest producer in 2018, overtaking Japan, and it is also the second-largest consumer.
After Japan come the United States, Russia and South Korea. China alone makes over half of the world’s steel. The gap to China remains large, but India is far ahead of the rest of the field.
Several factors drove this. The 2017 National Steel Policy set long-term targets. Safeguard and anti-dumping duties protected domestic mills, and the Production-Linked Incentive scheme for specialty steel pushed the industry toward higher-value products.
Government spending on roads, railways, ports, housing and metro systems has kept domestic consumption growing at a strong pace. The Insolvency and Bankruptcy Code moved stressed assets into stronger hands, which fed consolidation. Iron-ore production rose 6.2% to 307 million tonnes in FY26.
Coking coal remains a weak point, with domestic output of 65 million tonnes against imports of 84 million tonnes.
The draft includes a Rs 5,000 crore Viksit Bharat Ispat Scheme to help small and secondary producers upgrade technology and cut emissions, plus a push on 175 specialty steel projects for defence, aerospace, high-speed rail and automotive uses. It also proposes anti-dumping and safeguard duties against
cheap, subsidised flat-steel imports.
Trade figures underline the opportunity and the vulnerability. India was a net exporter of finished steel in 2020–21 and 2021–22, exporting 10.8 and 13.5 million tonnes, respectively. Exports then fell to 4.9 million tonnes in 2024–25 while imports rose to 9.6 million tonnes, making India a net importer.
In the first eleven months of 2025–26, provisional figures showed exports of 6.0 million tonnes and imports of 5.6 million tonnes, a return to net-exporter status.
The earlier import surge exposed gaps in price competitiveness and higher-grade products; it also showed how rapidly trade balances can move with global prices, demand and trade measures. That is why the draft stresses trade remedies.
The structure has also changed. Public producers such as Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) remain important, but private companies account for most output. About 128 million tonnes of crude steel were produced in 2024–25, against 24 million tonnes in the public sector.
The private sector has driven most of the new capacity and dealmaking: Tata Steel acquired Bhushan Steel in 2018 and later merged several group steel subsidiaries into itself. It is also expanding, with plans to raise capacity at subsidiary NINL to 5 million tonnes. ArcelorMittal and Nippon Steel acquired
Essar Steel in 2019, which became AM/NS India.
JSW Steel took over Bhushan Power & Steel, building scale in flat products in 2021. Jindal Steel & Power expanded in Odisha and Chhattisgarh and pursued acquisitions such as Monnet Ispat. Such deals brought capital, management and operating scale to existing plants rather than relying only on greenfield construction.
The Indian steel industry is now facing a tough challenge from the EU’s Carbon Border Adjustment Mechanism (CBAM). Its definitive phase began on 1 January 2026, requiring importers to declare embedded emissions and surrender matching certificates.
India’s steel-emission intensity of 2.54 tonnes of CO₂ per tonne of crude steel compares with a global average of 1.91, and its heavy export dependence on the EU means India ranks among the countries most exposed.
The EU is also phasing down free emissions allowances for its domestic producers. Indian suppliers therefore face pressure to measure and verify product-level emissions. Higher-carbon steel could lose competitiveness or margins in Europe, while producers with credible lower-carbon data and processes may gain an advantage.
The impact will differ by product, route, buyer and emissions intensity; it is not a uniform tariff on every Indian steel shipment. This pressure arrives as India’s steel sector expands on a comparatively carbon-intensive pathway, with blast furnaces still central and coal-based sponge iron widely used.
The picture is not entirely bleak. Indian producers are responding with scrap-based electric arc furnaces, such as Tata Steel’s Rs 3,200 crore, 0.75 MTPA plant at Ludhiana, and with a Green Steel Taxonomy, notified in 2024, that defines green steel as below 2.2 tonnes of carbon-dioxide equivalent per tonne of finished steel and assigns ratings to lower-emission output.
The government’s green-hydrogen pilots, greater scrap use, renewable electricity, energy efficiency, carbon capture and eventual adoption of hydrogen-based direct reduction can lower emissions. The draft aims to cut average carbon intensity from 2.54 to about 1.54 tonnes of CO₂ per tonne of crude steel by 2047.
If the policy gets the balance right between scale and cleaner production, steel could become the backbone of the Viksit Bharat push.
Views expressed are personal