India Sets 604 Million Tonne Steel Capacity Goal for 2047, With Emissions Still Expected to Rise

A larger steel industry, with a growing carbon challenge

India has released its draft National Steel Policy Vision 2047 for public consultation, setting a target of 604 million tonnes of annual steelmaking capacity, compared with about 220 million tonnes now. The roadmap projects finished steel demand of 505 million tonnes, crude steel production of 531 million tonnes and exports of 45 million tonnes by 2047.

The expansion would place much greater demands on raw materials. The Ministry of Steel expects annual iron ore requirements to reach 772 million tonnes and coking coal demand to rise to 236 million tonnes. India is largely self sufficient in iron ore, but imports about 92% of its coking coal, making fuel security a central challenge.

The draft also seeks to reduce average carbon dioxide emissions per tonne of crude steel from 2.54 tonnes to about 1.54 tonnes by 2047. That is a reduction of roughly 39%, consistent with a longer transition toward India's national net zero goal for 2070.

Cleaner production per tonne does not, however, mean lower total emissions. Multiplying the projected output by the targeted emissions intensity gives annual emissions of about 818 million tonnes of carbon dioxide in 2047, compared with roughly 432 million tonnes using current production figures. The policy therefore combines a major improvement in production efficiency with a trajectory that could nearly double the sector's annual emissions.

What the 604 million tonne target assumes

The capacity target represents an increase of 384 million tonnes, or about 175%, from the present level. Capacity is the amount plants can produce, rather than their actual output. The draft assumes average capacity utilisation of 88%, compared with 77% in 2025. Applying 88% to 604 million tonnes produces approximately 531 million tonnes of crude steel, matching the production projection.

The demand forecast rests on annual gross domestic product growth of around 7%. Both assumptions matter: building furnaces and mills alone would not deliver the projected output unless demand and operating rates also increase. The ministry plans to review demand projections approximately every five years.

Finished steel demand is expected to rise from 164 million tonnes in 2025 to 2026 to 505 million tonnes by 2047, just over three times the current level. Per capita consumption would increase from 116 kilograms to 302 kilograms. The current figure is below the global average of 209 kilograms, while the 2047 target is above that present benchmark.

Construction and infrastructure account for about 67% of domestic steel consumption. Automobiles, engineering goods, appliances and packaging contribute another 28%. Together, those categories represent about 95% of consumption, tying the demand outlook closely to building activity and manufacturing.

Capacity, crude steel production and finished steel demand are different measures. Crude steel is the initial steel output before processing into finished products. The draft's headline figures should therefore not be treated as interchangeable quantities.

How the new roadmap changes the 2017 policy

The draft is intended to replace the National Steel Policy 2017, which targeted 300 million tonnes of steelmaking capacity and per capita consumption of 160 kilograms around 2030. The new policy extends the planning horizon to 2047 and gives greater attention to emissions, artificial intelligence, technology development and raw material security.

Steel Secretary Sandeep Poundrik has said the earlier framework required reconsideration as the industry's needs changed. Describing the reason for updating it, he said the 2017 policy:

needed a relook

The record of growth helps explain the revision. Crude steel production increased from about 89 million tonnes in the financial year 2014 to 2015 to 170 million tonnes in 2025 to 2026, an increase of about 91%. Finished steel consumption rose from 77 million tonnes to 164 million tonnes, an increase of approximately 113%. India's share of global crude steel production grew from 5.2% in 2014 to about 8.9% in 2025.

Reports differ on the dating of some benchmarks. The 170 million tonne production figure is described both as a 2025 figure and as output for the financial year 2025 to 2026. The draft's intermediate capacity projection of 294 million tonnes is placed at 2030 in one account and at the financial year ending in 2031 in another. The earlier 300 million tonne target is similarly described as applying to 2030 or 2030 to 2031.

The main milestones are:

• 2014 to 2015: crude steel production was about 89 million tonnes and finished steel consumption was 77 million tonnes.
• 2017: the previous National Steel Policy set a capacity target of 300 million tonnes around 2030.
• 2025 to 2026: reported production reached 170 million tonnes and finished steel consumption reached 164 million tonnes.
• 2030 or the financial year ending in 2031: the new roadmap projects capacity of 294 million tonnes.
• 2047: targeted capacity reaches 604 million tonnes, with projected crude steel output of 531 million tonnes.
• 2070: India's national net zero goal provides the longer climate horizon.

Coking coal dependence becomes a bigger exposure

Annual coking coal demand is projected to increase from 72 million tonnes to 236 million tonnes by 2047, about 3.3 times the current requirement. Coking coal is processed into coke, which supplies heat and helps remove oxygen from iron ore in conventional blast furnace steelmaking.

India imports about 92% of its requirement, mainly from Australia, the United States and Russia. With raw materials accounting for 65% to 70% of steelmaking costs, access to reliable supplies affects both the ability to expand production and the cost of the steel produced.

The ministry proposes a combination of domestic mining, expanded coal washing, overseas asset purchases and supply agreements lasting several years. International outreach would seek a wider range of suppliers, while artificial intelligence would help optimise coal blends and increase the use of domestic coking coal.

Existing washing facilities show that installed capacity is only part of the problem. Operational coking coal washing capacity is about 39 million tonnes annually, but roughly 17 million tonnes of feed coal produces only around 6 million tonnes of washed output. The draft identifies low yields and idle capacity as constraints.

Coal washing removes unwanted material before the coal is used. The feed figure is approximately 44% of operational washing capacity, while washed output is about 35% of feed. Those are separate measures: using more of the available capacity and recovering more usable coal from each tonne of feed would address different weaknesses.

Iron ore security depends on grade and transport

Iron ore demand is projected to rise from 299 million tonnes now to 772 million tonnes by 2047, an increase of about 158%. Although India is largely self sufficient in the mineral, the draft flags a deterioration in the quality of its reserve mix.

The share of high grade ore in reserves fell from 70% in the financial year 2018 to 2019 to 46% in 2021 to 2022. That is a decline of 24 percentage points. Ore quality matters because material with less iron generally requires more processing to produce a usable steelmaking input.

The policy proposes securing access to high grade reserves through overseas assets and joint ventures. It also keeps manganese, limestone and other essential inputs within its resource planning, rather than treating iron ore and coal as the industry's only supply concerns.

Transport is another part of the plan. The draft envisages expanded slurry pipelines for moving iron ore and coking coal, supported by viability gap funding and a single approval mechanism. Slurry pipelines move finely divided material mixed with water. Viability gap funding is public support intended to help infrastructure projects proceed when expected commercial returns alone are insufficient.

Lower emissions intensity is not an absolute cut

The steel sector accounts for about 10% to 12% of India's carbon dioxide emissions. Its average emissions intensity of 2.54 tonnes of carbon dioxide per tonne of crude steel is approximately 32% above the reported global average of 1.92 tonnes.

The 2047 target of 1.54 tonnes would be about 20% below that present global benchmark. This comparison measures the scale of the intended improvement, not India's likely ranking in 2047, when other countries' production methods may also have changed.

The draft outlines a transition beginning with energy efficiency and renewable electricity, followed by coal gasification, direct reduced iron made using green hydrogen, and eventually carbon capture, utilisation and storage. It also calls for greater scrap use and the development of domestic scrap processing infrastructure.

Direct reduced iron is produced by removing oxygen from iron ore without melting it in a conventional blast furnace. Hydrogen made using renewable electricity can replace carbon based reducing agents in that process. Carbon capture systems collect carbon dioxide for storage or use, rather than allowing it to enter the atmosphere.

The draft does not specify an absolute emissions target. Using its production and intensity figures, the current calculation is 170 million tonnes of crude steel multiplied by 2.54, giving 431.8 million tonnes of carbon dioxide. The 2047 calculation is 531 million tonnes multiplied by 1.54, giving 817.7 million tonnes.

That is an increase of about 89%. The distinction is central to evaluating the roadmap: the industry could meet its emissions intensity target while its total annual emissions continue to grow. The proposed technologies would make production cleaner per tonne, but the much larger output would outweigh that improvement in the draft's arithmetic.

Small producers may receive a separate incentive scheme

The secondary steel sector comprises around 2,550 units and accounts for nearly 47% of crude steel production capacity. Its scale means that technology upgrades cannot be confined to the largest integrated plants if the national emissions target is to be achieved.

The draft promises support for raw material access, improved technology, skills and safety. At the Confederation of Indian Industry's Manufacturing Confluence 2026, Poundrik also described a proposed Viksit Bharat Ispat initiative with an outlay of Rs 5,000 crore, equivalent to Rs 50 billion.

The proposed scheme would provide incentives to small steel producers based on production and reductions in carbon emissions. Better technology, better raw materials and greater use of renewable energy would be routes to those reductions. The scheme was awaiting approval when described, so the proposed allocation should not be treated as funding already disbursed.

For larger producers, Poundrik indicated that a Carbon Credit Trading Scheme was being prepared for notification. That would provide a different policy route from direct incentives for smaller mills. The final rules, implementation dates and eligibility conditions for these measures are not established in the reported announcements.

Speciality steel, technology and safer plants

The roadmap seeks to expand domestic production of speciality and stainless steel, promote manufacturing clusters that process steel into other products, aggregate demand and establish Centres of Excellence. These measures aim to develop capability as well as increase tonnage.

Poundrik said 175 speciality steel projects involving investments of Rs 55,000 crore, or Rs 550 billion, were under way. Speciality grades are used in sectors including automobiles, defence and aerospace, where material properties and consistency can be as important as volume.

The draft also calls for domestic technology development, shared data standards, digital infrastructure and greater use of artificial intelligence and autonomous production systems. Revised Indian Standards and conformity assessment mechanisms would address product quality by updating requirements and checking whether steel meets them.

Safety measures include a Steel Industry Safety Council, periodic assessments of skill gaps and stronger training institutions. The draft also proposes a Safety Directorate with jurisdiction over all iron and steel producers.

Reports differ on the council's status. Accounts describing the draft present it as a proposal, while Poundrik's remarks describe a council already notified and chaired by the steel secretary. The latter account says its membership includes leaders of integrated steel plants and representatives of smaller producers, with responsibilities covering operating procedures and independent investigations after accidents.

Exports and consultation leave decisions open

India became a small net exporter of finished steel in 2025 to 2026. Imports fell about 32% to 6.5 million tonnes, while exports rose around 36% to 6.6 million tonnes. Exports exceeded imports by only 0.1 million tonnes, making the 45 million tonne export target a substantial increase from the current base.

There is also a difference in how the export ambition has been described. Draft policy accounts give a target of 45 million tonnes of steel exports. Poundrik's earlier remarks allowed for exports either as finished steel or as steel embedded in manufactured goods. These categories are not identical, and the final framework would need consistent definitions to measure progress.

The ministry proposes import monitoring supported by artificial intelligence and continued trade remedies against substandard imports. Possible measures discussed include safeguard and anti dumping duties. More than 60% of steel imports come from countries with which India has free trade agreements, making trade commitments part of the policy setting.

Poundrik also said the ministry was examining the European Union's 1.6 million tonne steel quota for India before approaching the relevant governments. Access for different product grades matters alongside the total quota, because India's ability to export varies across categories.

The draft is now at the consultation stage, rather than a final adopted policy. Earlier statements that publication was expected within days preceded its release. No confirmed consultation closing date or final adoption date has been announced in the reported details. The planned reviews approximately every five years would provide opportunities to adjust demand forecasts as economic growth, technology and trade conditions change.

Key Points

• India targets 604 million tonnes of annual steelmaking capacity by 2047, up from about 220 million tonnes.
• The draft projects 531 million tonnes of crude steel output and 505 million tonnes of finished steel demand.
• Iron ore demand could reach 772 million tonnes and coking coal demand 236 million tonnes.
• India imports about 92% of its coking coal requirement.
• Emissions intensity is targeted to fall from 2.54 to 1.54 tonnes of carbon dioxide per tonne of crude steel.
• The projected output and intensity imply annual emissions of about 818 million tonnes, compared with roughly 432 million tonnes currently.
• A proposed Rs 5,000 crore scheme would link support for small producers to output and emissions reductions.
• The policy remains a draft for consultation, with demand projections expected to be reviewed approximately every five years.