Assocham Calls for Policy Support for Green Steel Production Ahead of FY27 Union Budget

Industry body Assocham has urged the government to include targeted support for low-carbon steelmaking in the upcoming FY27 Union Budget, emphasising the need for incentives around hydrogen-based production and affordable green financing to help decarbonise India’s steel sector.

In its pre-Budget recommendations, the chamber highlighted that hydrogen-based direct reduced iron (DRI) technology and concessional green credit could accelerate the industry’s transition away from fossil fuel-intensive processes towards cleaner alternatives. It also suggested incentives for waste-heat recovery systems and renewable captive power plants to lower emissions and improve sustainability.

Assocham noted that while India ranks among the world’s largest steel producers, the sector faces challenges including high raw material costs, dependence on imported coking coal, and stagnant iron ore output, which together strain domestic mills. Strengthening scrap collection and recycling infrastructure through skill development was also recommended to reduce import reliance.

The industry group believes that well-designed fiscal incentives can help position India as a global hub for steel and value-added products under the Make in India initiative, while supporting sustainable growth and competitiveness.