India targets 604 million tons of steel capacity by 2047 in draft policy

India wants to nearly triple its domestic steelmaking capacity to 604 million metric tons by 2047, according to a draft national policy released by the steel ministry for public consultation.

The target represents a massive expansion from the country's existing capacity of roughly 220 million tons. New Delhi expects domestic demand to surge over the coming decades, driven by highway construction, urban infrastructure projects and manufacturing.

Yet the proposal attempts to balance that growth with environmental pledges. India has committed to reaching net-zero emissions by 2070, and the steel sector is one of the heaviest industrial polluters, still overwhelmingly dependent on coal-fired blast furnaces.

Cutting carbon intensity

Under the draft policy, the government wants the industry to reduce its carbon emission intensity to about 1.54 tons of carbon dioxide per ton of crude steel by 2047. The current average sits at 2.54 tons.

Achieving that target would mean cutting emissions per ton by nearly 39 per cent. To get there, mills will have to adopt cleaner production technologies and shift away from conventional coal-intensive processing methods, though the document does not set out binding technology mandates at this stage.

The scramble for raw materials

Expanding capacity to more than 600 million tons will also require enormous volumes of raw inputs. The steel ministry estimates annual iron ore demand will climb to 772 million tons by 2047.

To ensure plants have access to higher-grade ore, the government plans to pursue overseas joint ventures and acquire mining assets abroad. High-grade reserves are critical for modern, lower-emission steelmaking setups, including direct reduced iron plants that run on natural gas or hydrogen.

Coking coal presents an even steeper hurdle. India already relies heavily on imports for metallurgical coal, and the policy projects domestic demand will reach 236 million tons by 2047. To guard against price volatility and supply disruptions, the ministry proposes what it calls "strategic global outreach", encouraging Indian firms to secure supplies and buy coal assets overseas.

The targets are not final. The ministry has made the draft document available for public comments, and the final targets may shift once industry executives, environmental groups and state governments submit their feedback.