India is preparing a new National Steel Policy that will set out a long-term roadmap for the sector up to 2047, with the government targeting steelmaking capacity of more than 600 million tonnes and domestic steel consumption of over 500 million tonnes by that year.
Steel Secretary Sandeep Poundrik said on September 29 that the draft policy is expected to be placed in the public domain within about a week for comments from industry stakeholders. The proposed framework will replace the National Steel Policy, 2017, whose targets were designed around the sector’s requirements up to 2030-31.
The new policy is being formulated around the government’s Viksit Bharat vision for 2047 and will address capacity expansion, domestic consumption, exports, raw material availability, technology adoption, competitiveness and decarbonisation. The policy is also expected to establish longer-term targets for green steel, speciality steel and stainless steel.
India’s steelmaking capacity stood at around 220 million tonnes in fiscal 2026, according to the draft policy reviewed by Reuters. Government data puts crude steel capacity at about 222.7 million tonnes as of July 2026. The proposed target of more than 600 million tonnes would therefore require the country to nearly triple its current capacity over the next two decades.
The government expects domestic steel consumption to cross 500 million tonnes by 2047. Around 45 million tonnes of this requirement could be accounted for by exports, either as direct steel exports or through steel embedded in manufactured products, Poundrik said. He described these estimates as conservative. The proposed expansion comes as India’s steel demand continues to be driven by infrastructure, construction, manufacturing and automotive activity. Finished steel consumption increased 7.8% year-on-year to 55.9 million tonnes during April-July of the current financial year, while finished steel production rose 4% to 54.3 million tonnes, according to Ministry of Steel data. Crude steel production during the period increased 2.6% to 56.3 million tonnes.
Raw material availability has been identified as one of the major challenges that could accompany the expansion of the domestic steel industry. The draft policy projects India’s iron ore requirement at 772 million tonnes and proposes securing access to high-grade reserves through overseas assets and joint ventures.
Coking coal is another major requirement. The government expects demand for coking coal to reach 214 million tonnes and plans to diversify supplies through strategic global outreach and acquisition of overseas assets. India currently remains heavily dependent on imports for coking coal, making supply security an important consideration for future capacity expansion.
The issue of imports of finished steel has also gained importance. India was a net importer of finished steel during April-August, bringing in around 3.5 million tonnes, 29.5% higher than in the corresponding period a year earlier. China accounted for 31.8% of the imports during the period, making it the largest source of finished steel imports into India.
Poundrik said raw material availability and exports are among the key challenges facing the steel industry, particularly as countries increase trade barriers. The proposed policy is also expected to address cheap and sub-standard steel imports through measures including safeguard and anti-dumping duties.
The new policy is also expected to give greater attention to the competitiveness of smaller steel producers. The government is proposing the ₹5,000-crore Viksit Bharat Ispat scheme for small steel producers, under which incentives would be linked to production as well as reductions in carbon emissions.
The proposed support is intended to help smaller producers improve technology, production efficiency and environmental performance. Technology upgrades and access to better raw materials are expected to become increasingly important as the industry moves towards lower-emission production.
The government is simultaneously promoting speciality steel production for sectors such as automobiles, defence and aerospace. Around 175 speciality-steel projects involving investments of about ₹55,000 crore are currently under implementation.
Decarbonisation is another major component of the proposed steel policy. According to the draft reviewed by Reuters, India aims to reduce the steel sector’s average carbon emission intensity to around 1.54 tonnes of carbon dioxide per tonne of crude steel by 2047, compared with the current level of 2.54 tonnes.
The proposed reduction is being aligned with India’s broader target of achieving net-zero emissions by 2070. The long-term steel roadmap is therefore expected to address not only the scale of capacity addition but also the technologies and production processes that will be required to lower emissions as output expands.
The National Steel Policy 2017 had set a target of 300 million tonnes of crude steel capacity and 255 million tonnes of production by 2030-31, along with a target of 230 million tonnes of finished steel demand and production. India has since seen substantial growth in capacity and consumption, while the industry is now facing additional challenges from global trade restrictions, raw material security and decarbonisation.
The proposed policy consequently takes a much longer view, extending the sector’s planning horizon to 2047. It will seek to provide a framework for expanding domestic capacity, meeting rising consumption, strengthening raw material security and improving the competitiveness of Indian steel producers.
The draft policy is expected to be released for public consultation within about a week. Stakeholder feedback will form part of the process before the government finalises the new National Steel Policy.
Sources: Reuters, Business Standard, Ministry of Steel, PIB