NEW DELHI, Oct 11: India has unveiled a draft steel policy that proposes increasing the country’s crude steel production capacity to 604 million metric tonnes by 2047, setting out a long-term roadmap to support infrastructure expansion, industrial development and the country’s broader manufacturing ambitions.
The draft National Steel Policy Vision 2047, released for public consultation, seeks to raise steelmaking capacity from approximately 220 million tonnes at present to nearly three times that level over the coming two decades. The proposal also focuses on improving raw material availability, developing higher-value steel products and reducing the industry’s carbon footprint.
The policy comes at a time when India is seeking to strengthen its position as a major manufacturing economy and expand infrastructure across transport, housing, energy and industrial sectors. Steel is a critical input for these activities, making the availability of sufficient production capacity an important part of the country’s long-term development strategy.
According to the proposed roadmap, finished steel demand could reach 505 million tonnes by 2047, while per capita steel consumption is projected to rise to 302 kilograms from the current level of around 116 kilograms. The projections reflect expectations of increased construction activity, urbanisation, industrial investment and infrastructure development.
The draft policy has been opened for public feedback, with the Steel Ministry inviting stakeholders to submit their suggestions by October 30, 2026. The final policy could be shaped by the responses of industry representatives, manufacturers, raw material suppliers and other participants in the steel value chain.
Capacity expansion at the centre of the plan
The proposed increase in steel capacity represents a substantial expansion of India’s industrial base. Steel is used extensively in buildings, bridges, railway infrastructure, highways, power projects, machinery, automobiles and manufacturing equipment.
Higher domestic production capacity could help meet the anticipated rise in demand without relying excessively on imported finished steel. It could also create opportunities for steel producers to invest in modern plants, upgrade existing facilities and improve production efficiency.
India’s crude steel output has increased significantly over the past decade. According to industry estimates cited in coverage of the policy, production rose from approximately 89 million tonnes in financial year 2014-15 to around 170 million tonnes in 2025-26. Finished steel consumption also increased from nearly 77 million tonnes to approximately 164 million tonnes over the same period.
The proposed target would require the industry to maintain a sustained pace of investment and capacity addition. Companies would need to assess future demand, financing costs, infrastructure availability and access to raw materials before committing capital to large-scale projects.
The government will also have to consider whether transport networks, ports, railways and logistics systems can support the movement of significantly larger quantities of iron ore, coal and finished steel.
Domestic demand expected to drive growth
The policy’s projected increase in steel consumption is closely linked to India’s infrastructure and industrial development plans.
Road construction, railway modernisation, urban housing, commercial buildings, renewable energy installations and manufacturing facilities are all significant sources of steel demand. The expansion of industrial corridors and logistics infrastructure could provide further support to consumption.
The target of 302 kilograms in per capita steel consumption by 2047 would represent a considerable increase from current levels. Achieving it would depend not only on government infrastructure spending but also on rising household incomes, private investment and broader economic growth.
The automobile, engineering, capital goods and construction industries could benefit from a more developed domestic steel supply chain. Reliable access to different grades of steel is particularly important for manufacturers that require materials with specific strength, durability and performance characteristics.
The draft also envisages finished steel exports, including indirect exports through steel-intensive products, reaching 45 million tonnes. This ambition would require Indian manufacturers to remain competitive in international markets in terms of quality, cost, technology and delivery schedules.
Export growth could provide companies with additional markets when domestic demand slows. However, international competition, trade restrictions and environmental requirements may influence how quickly Indian producers can increase overseas sales.
Raw material security emerges as a major priority
One of the central challenges associated with the proposed expansion is ensuring adequate supplies of iron ore and coking coal.
The draft policy estimates that India could require approximately 772 million tonnes of iron ore annually by 2047. It also highlights the need to secure sufficient coking coal supplies, including through international acquisitions, joint ventures and diversification of import sources.
Iron ore is a basic input for conventional steelmaking, while coking coal is used in blast furnace operations. Any disruption in the availability or affordability of these materials can increase production costs and affect the competitiveness of steel manufacturers.
Although India has significant iron ore resources, future requirements will place greater emphasis on efficient mining, transportation infrastructure, beneficiation and the sustainable use of available reserves.
Coking coal presents a different challenge because domestic supplies do not fully meet the requirements of the steel industry. Import dependence exposes producers to changes in international prices, shipping costs, currency movements and geopolitical disruptions.
The proposed strategy of securing overseas resources could help companies diversify supplies and reduce exposure to sudden market changes. Joint ventures and long-term supply arrangements may also provide greater certainty for manufacturers planning investments over several decades.
The industry will nevertheless need to balance overseas resource acquisitions with commercial risks, financing requirements and changing global demand.
Decarbonisation becomes a key policy objective
Alongside capacity expansion, the draft policy places emphasis on reducing the carbon intensity of steel production.
The proposed target is to bring average emissions down from 2.54 tonnes of carbon dioxide per tonne of crude steel to 1.54 tonnes by 2047. The objective is consistent with India’s broader ambition of reaching net-zero emissions by 2070.
Steel production is energy-intensive, and conventional blast furnace methods rely heavily on coal. Increasing output while lowering emissions will therefore require technological improvements, cleaner energy sources and changes in production methods.
Potential measures include greater use of scrap steel, energy-efficient equipment, improved furnace operations, renewable electricity and technologies that reduce emissions from ironmaking. The feasibility and speed of adoption will vary according to plant design, electricity availability, raw material quality and investment costs.
Scrap recycling could play an important role in this transition. Using recycled steel can reduce the need for virgin raw materials and may lower energy consumption, although the environmental benefits depend on the production route and the electricity used.
The policy’s focus on emissions also reflects the changing expectations of international customers. Manufacturers in several markets are paying greater attention to the carbon content of the materials they purchase, which could influence the future competitiveness of steel exporters.
However, installing cleaner technologies can require significant upfront expenditure. Policymakers and companies will need to consider financing arrangements, technology access and the potential effect of transition costs on domestic steel prices.
Investment, jobs and manufacturing opportunities
Expanding steel capacity to the proposed level would require investment across mining, processing, transportation, energy and industrial infrastructure.
Large steel projects can generate employment during construction and operation, while creating additional demand for engineering services, industrial equipment, logistics, maintenance and other supporting businesses.
Smaller manufacturers and downstream industries could also benefit if improved domestic availability reduces supply uncertainty and supports the development of specialised steel products.
The wider economic impact will depend on how effectively new capacity is integrated with local supply chains. Investment in skills, research and development, automation and advanced manufacturing will be important to ensure that expansion translates into higher productivity.
At the same time, the industry must avoid creating excess capacity that cannot be supported by actual demand. Steel markets are cyclical, and large investments made during periods of strong prices can become difficult to sustain when construction activity or global consumption weakens.
Producers will therefore need to make investment decisions based on realistic demand projections, efficient operations and access to competitive financing.
Trade competition and implementation challenges
India’s steel industry also faces competition from international producers and must respond to changes in global trade conditions.
Imports can influence domestic prices, particularly when overseas producers have lower costs or when excess supply is directed towards Indian markets. At the same time, imported steel can provide materials that domestic manufacturers may not produce in sufficient quantities or at the required specifications.
The government’s long-term strategy will need to balance the interests of domestic producers, steel-consuming industries and consumers of finished goods.
Environmental regulations, land availability, water requirements and local infrastructure could also influence the pace of new projects. Securing adequate power and transportation facilities will be essential for large plants, particularly in regions where industrial capacity is already concentrated.
The consultation process provides an opportunity for industry participants to identify gaps in the proposed roadmap and recommend practical measures to address them.
Ultimately, the draft National Steel Policy Vision 2047 sets out an ambitious plan to expand production while improving resource security and reducing emissions. Achieving the proposed targets will depend on sustained investment, technological progress, reliable supplies and the ability of Indian manufacturers to compete in domestic and global markets.
The final policy is expected to provide a framework for guiding the industry’s development as India works towards its long-term economic and industrial objectives.