India’s Steel Sector: A Path Towards Green Industrial Policy and Capacity Expansion

India's iron and steel sector is poised for significant growth as the country aims to achieve an installed steelmaking capacity of 300 million tonnes (MT) by 2030. This ambition is driven by robust demand from infrastructure development, housing, automobiles, and other industries. Currently, India is the world's second-largest crude steel producer, with a production capacity that has expanded from 97 MT in 2012-13 to 235 MT as of November 2025. However, to meet the targets set by the National Steel Policy (NSP), an additional 65 MT of capacity must be added over the next five years.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030Policy Brief: Green Industrial Policy for India’s Iron and Steel Sector Transition

The Indian government is prioritizing higher steel production and the adoption of low-carbon technologies. Initiatives such as the Production Linked Incentive (PLI) scheme aim to promote value-added steel production, particularly in sectors like defense and renewable energy. The Ministry of Steel is also focusing on securing raw material availability through new coking coal reserves and iron ore auctions, while encouraging the beneficiation of low-grade iron ore to enhance resource efficiency.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030Policy Brief: Green Industrial Policy for India’s Iron and Steel Sector Transition

Despite the optimistic outlook, the steel industry faces several challenges. Rising imports, volatile raw material prices, and global trade uncertainties pose significant risks. Industry leaders have expressed concerns regarding the execution of policies and the need for sustained demand creation. Naveen Jindal, President of the Indian Steel Association, emphasized the importance of policy stability and bold investments to achieve global benchmarks in competitive and low-carbon steelmaking.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

As India commits to achieving net-zero emissions by 2070, the transition to green steel production becomes critical. However, the capital-intensive nature of green steel technologies presents competitiveness challenges, particularly under mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM). Industry experts have called for accelerated adoption of hydrogen-based direct reduced iron (DRI) processes, increased scrap usage, and the integration of renewable energy to overcome these hurdles.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

The Indian steel sector is projected to grow by approximately 8% in FY26, although pricing pressures are expected to persist due to a temporary supply surplus. Domestic hot-rolled coil prices have seen a significant decline, reflecting global market dynamics. Nevertheless, the government remains optimistic that continued policy support and investments will position India as a globally competitive steel powerhouse by 2030.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

The Ministry of Steel has reiterated its commitment to enhancing steel production and adopting low-carbon technologies, stating that "sustained policy support will keep India on track toward becoming a globally competitive steel powerhouse." Industry bodies have highlighted the need for faster execution of policies and addressing logistical challenges to ensure the sector's growth.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

While projections indicate that India's steel production capacity will reach 300 MT by 2030, there are discrepancies regarding the timeline and specific capacity additions required. Some sources suggest that the current capacity may remain unchanged by FY26, while others emphasize the need for immediate action to meet NSP targets.

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

• “Naveen Jindal, President of the Indian Steel Association (ISA), said sustained demand creation, policy stability and bold investments are critical for India to set global benchmarks in competitive and low-carbon steelmaking.” — Naveen Jindal, President of the Indian Steel Association

India Prioritises Steel Capacity Expansion, Green Steel and Raw Material Security to Achieve 300 MT Target by 2030

This comprehensive overview highlights the ambitious goals and challenges facing India's steel sector as it navigates the transition towards a more sustainable and competitive future.

Policy Brief: Green Industrial Policy for India’s Iron and Steel Sector Transition