India, Sep 30 : India is preparing a long-term steel policy aimed at raising the country’s steelmaking capacity to 600 million metric tonnes by 2047, more than twice the capacity available at the end of fiscal 2026.
The proposed roadmap, outlined by the country’s steel secretary on September 29, is designed to guide the industry over the next two decades. It focuses not only on expanding production but also on reducing carbon emissions, improving access to raw materials and strengthening the industry’s ability to respond to rising domestic demand.
India’s steelmaking capacity stood at about 220 million tonnes in fiscal 2026. Reaching 600 million tonnes by 2047 would therefore require substantial investment in new plants, expansion of existing facilities, supporting infrastructure and raw-material supply chains.
The proposed strategy comes as India expects steel demand to increase alongside infrastructure development, construction, automobile production and industrial expansion. The government is also seeking to reduce vulnerabilities arising from dependence on imported raw materials and finished steel.
One of the central challenges identified for the industry is access to iron ore and coking coal. The draft policy projects India’s iron ore requirement at 772 million tonnes and coking coal demand at 214 million tonnes by 2047.
To secure supplies, the government plans to pursue overseas mining assets and joint ventures. The proposed approach is intended to diversify sources of raw materials and provide Indian steel producers with greater security as domestic requirements increase.
Coking coal is particularly important because it is a major input for conventional steelmaking. Greater availability of competitively priced supplies will be significant for producers as they expand capacity and attempt to manage production costs.
The industry is already facing pressure from higher raw-material costs and changes in international trade. Indian steel prices are expected to rise in the coming weeks as post-monsoon demand from infrastructure and automobile sectors strengthens, while higher coking coal costs increase production expenses.
India’s trade position in finished steel also highlights the challenges facing domestic producers. Between April and August, the country imported 3.5 million tonnes of finished steel, representing a 29.5 per cent increase compared with the same period a year earlier. China accounted for 31.8 per cent of those imports, making it the largest supplier during the period.
The increase in imports comes as international trade conditions become more complicated. Several countries have introduced or considered higher trade barriers for steel, creating uncertainty for exporters and producers with international supply chains.
The proposed policy therefore places emphasis on strengthening India’s domestic manufacturing base while improving access to resources needed for future growth.
Environmental considerations form another major component of the roadmap. The draft document targets a reduction in average carbon-emission intensity from approximately 2.54 tonnes of carbon dioxide per tonne of crude steel to around 1.54 tonnes by 2047.
The target aligns the steel industry’s long-term transition with India’s broader commitment to achieving net-zero emissions by 2070. For steelmakers, meeting the goal will require technological changes, greater energy efficiency and increased adoption of lower-emission production methods.
The transition is likely to require substantial capital investment. Steel plants are among the most energy-intensive industrial facilities, meaning that reducing emissions while increasing production will require companies to improve the efficiency of existing operations as well as deploy newer technologies.
The government’s long-term approach also reflects the strategic importance of steel to India’s wider economy. Steel is essential for roads, bridges, railways, housing, automobiles, machinery and numerous manufacturing activities. A larger domestic production base can therefore support multiple industries simultaneously.
At the same time, expanding capacity does not automatically guarantee that all new production will be economically viable. Producers will need reliable supplies of raw materials, competitive energy costs, efficient logistics and access to domestic and international markets.
The current increase in imports demonstrates why those factors matter. If domestic producers face substantially higher costs than overseas suppliers, additional capacity alone may not prevent import competition.
Trade policy will consequently remain an important part of the industry’s future. The steel sector is already dealing with changing global tariff structures and rising barriers, according to the steel secretary. These developments could influence India’s export opportunities as well as the level of competition in the domestic market.
The government’s proposed overseas resource strategy could help address one part of the challenge. Acquiring stakes in foreign mines or entering partnerships with international resource companies could provide Indian steelmakers with greater visibility over long-term supplies.
However, overseas investments also expose companies to international commodity prices, regulatory changes and geopolitical risks. A diversified sourcing strategy would therefore need to account for more than simply securing additional volumes.
Domestic infrastructure will also have to expand alongside steel capacity. Higher output requires efficient rail networks, ports, freight corridors, power supplies and storage facilities. Without adequate logistics, increased production can translate into higher transportation costs and bottlenecks.
The policy’s 2047 horizon gives producers a long period in which to plan investments. It also provides a framework for aligning industrial expansion with environmental targets rather than treating capacity growth and decarbonisation as separate objectives.
For steel companies, the roadmap could influence decisions on plant expansion, technology upgrades, raw-material procurement and international partnerships. Financial institutions and investors are also likely to assess how future projects manage both commercial returns and emissions requirements.
The immediate market environment remains important as the industry moves toward that longer-term goal. Rising steel prices could support producer margins in the near term, but higher coking coal costs could offset part of the benefit. Demand from construction and automobile manufacturers will also determine how much additional output the domestic market can absorb.
India’s planned expansion from 220 million tonnes of capacity in fiscal 2026 to 600 million tonnes by 2047 represents a major transformation of the country’s steel industry. The scale of the target means that its success will depend on coordinated investment in production facilities, raw materials, technology, energy and transportation.
The proposed policy is expected to be placed in the public domain after the government completes its process. Once released, its detailed measures will provide greater clarity on how India intends to achieve the capacity target, secure critical resources and reduce the industry’s emissions intensity over the next two decades.