Draft National Steel Policy: India Aims for 604 Million Tonnes of Capacity and Cleaner Steel by 2047
The Ministry of Steel released a draft of a new National Steel Policy for public consultation (asking the public and industry for comments before finalising it).
The draft aims to raise India's steelmaking capacity to about 604 million tonnes a year by 2047, almost three times the current capacity of about 220 million tonnes.
It aims to cut the sector's average carbon-emission intensity (CO2 released per tonne of steel made) from about 2.54 tonnes of CO2 per tonne of crude steel today to about 1.54 tonnes by 2047. This is in line with India's goal of net zero emissions by 2070.
The ministry expects iron ore demand of about 772 million tonnes. It plans to secure high-grade ore through foreign assets and joint ventures.
For coking coal, which India mostly imports, the draft plans to spread out sources through global outreach and by buying mines abroad.
The new policy will replace the National Steel Policy, 2017.
National Steel Policy: India's Roadmap for the Steel Sector
A National Steel Policy is a long-term plan made by the Government of India for the steel industry. It sets targets for how much steel India should be able to make and use, and lists the steps to get there in raw materials, technology, finance, demand and the environment. It does not run steel plants itself; it guides private and public companies on where the country wants to go.
The draft policy is the next version of this roadmap. It extends the horizon from 2030-31 to 2047 (the 100th year of Independence) and doubles the capacity ambition of the 2017 policy, while adding a clear emission-intensity goal and a plan to secure iron ore and coking coal from abroad.
Green Steel: Decarbonising Iron and Steel Making
Green steel is steel made with very little release of carbon dioxide (CO2). Normal steel making burns huge amounts of coal (as coke) in blast furnaces. Green steel replaces coal with cleaner options like hydrogen made from renewable power, electricity from solar and wind, and recycled scrap. India's steel sector is one of the country's largest industrial sources of greenhouse gases.
The draft policy's 2047 intensity target of about 1.54 tonnes CO2 per tonne would, if reached, bring India's average steel close to the level the taxonomy rates as 5-star green steel. Reaching it while tripling capacity will need large use of green hydrogen, scrap-based electric furnaces and renewable power.
Emissions Intensity vs. Absolute Emissions Targets
There are two main ways to set a goal for cutting greenhouse gases. An absolute target caps the total amount of gas a country or industry releases, for example "we will release 10% less CO2 in 2035 than in 2020". An intensity target limits the gas released per unit of output, for example per rupee of GDP or per tonne of steel. Under an intensity target, total emissions can still go up if the economy or industry grows fast, but each unit of output becomes cleaner.
The draft steel policy uses an intensity target: it aims to cut CO2 per tonne of crude steel from about 2.54 to about 1.54 tonnes by 2047. Since capacity is planned to almost triple in the same period, the steel sector's total emissions could still rise even if this target is met. This is exactly the difference between intensity and absolute targets.
- Draft target: about 604 million tonnes steel capacity by 2047; current capacity about 220 million tonnes
- Emission intensity: from about 2.54 to about 1.54 tonnes CO2 per tonne of crude steel by 2047 (a cut of about 39%)
- Expected iron ore demand: about 772 million tonnes
- Previous policy: National Steel Policy 2017 (300 million tonnes capacity by 2030-31)
- India: world's second-largest crude steel producer (about 164.9 million tonnes in 2025)
- Green Steel Taxonomy (December 2024): below 2.2 tonnes CO2e per tonne of finished steel qualifies as green
- India's net zero target year: 2070